To continually do so without finding a carcass in the details would be reputation suicide for any legitimate VC.
This kind of stuff is more common with corporate acquirers than established VC, I would expect, but it's kind of part of the game. If you have leverage as the start up, you demand short timeframes and meaningful deposits to keep the investors on task; if you don't have leverage, you get a bad deal (6-month exclusivity is crazy).
They’re fucked because their LPs are losing their minds, and as a result everything changed for them and they’re bailing on deals.
A huge chunk of this fund is money from Saudi Arabia. You think reputation matters, or that startup founders are going to turn away their money?
The business most of these startups are in is burning venture capital.
They're a major upstart, and will be around probably for quite some time. At least until a crash, probably longer.
There are very few players in town willing and able to bankroll what used to be IPO level funding. It's a new category of investing they've created, and they are still the leader.
Except that softbank vision fund is not a "normal" VC fund. They many times larger than the largest VC fund.
https://en.wikipedia.org/wiki/List_of_venture_capital_firms
Softbank has $100 billion in assets. The 2nd closest VC fund has $17 billion. Proportionally, softbank backing out of 6 deals is like the 2nd VC fund backing out of 1 deal.
All except Creator. Getting a company to enter into "an exclusive, six-month term sheet" is unusual and shitty.
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.
It sounds like they probably came out ahead anyway, if runway was even slightly a concern for them.
(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?)
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.
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.
I'm not trying to absolve Softbank here but if 6 months is bad, Creator knew it... they signed it.
Don't overthink it and assume motivations with zero proof - they're reporting facts about how SoftBank is dragging their heels on some deals.
At the very least, it's informative and helpful to anyone who may deal with them in the near future.