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by brenden2 2360 days ago
The negative is that you can't go out and do fundraising with any other parties until that 6 months is up. Depending on how much runway you have, that might be terminal for some startups.

I think 30 days is more typical, but YMMV. If the company is in dire need of funding then the VCs can usually get away with more.
1 comments
OnlineGladiator 2360 days ago
> The company pushed back, and SoftBank agreed to wire between $10 million and $15 million as a show of good faith.

It sounds like they probably came out ahead anyway, if runway was even slightly a concern for them.

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Bartweiss 2360 days ago
A six month lockup with no guarantee on the other side sounds crazy, but with a cash transfer to compensate and provide runway it looks a lot more reasonable.

(Of course, it depends a lot on the missing detail of what SoftBank took for that money in the absence of a deal. Was it a loan? A smaller investment at the same terms/valuation planned for the big one?)

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OnlineGladiator 2360 days ago
I'm not saying Softbank is a great fund (I've thought they made shitty investments long before the recent media frenzy in the past year), I just meant Creator isn't exactly a startup starlet that is drowning in funding opportunities. They're ~10 years old, have raised ~25 MM, and I heard their last round was already a downround (pretty bad considering how little they've raised and how long they've been around).

Looking from the outside, Creator was likely desperate for cash and happy to agree to anything - which they did. And unless they ended up with no cash at all after this brouhaha, they are probably still better off than they were initially.

And who knows - maybe Softbank will still give a stupid amount of cash to another terrible robotics startup. They've certainly done dumber things before.

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Bartweiss 2359 days ago
Yeah, all very true.

Out of all those stories, I'm most surprised SoftBank walked away on Seismic. Maybe they're scared that all the recent unicorns are going to lose value, but it's a pretty safe/standard company that wasn't depending on Softbank to live, and opening the Japanese market was a Softbank-specific perk.

Funding an already-unicorn at a high valuation isn't likely to get you the usual VC 10x, I guess. But it sounds like a way to help stabilize Softbank's rep with a modest win, not a risky bet to bail out of.

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