> But... as far as I'm aware he didn't hide any of this from his investors. They just handed over the cash no questions asked until the grift got too blatant (I think it was the trademark ownership/name change that was the straw that broke the camel's back.)
I find it interesting to try to derive rational explanations from seemingly irrational actions. If Softbank really are supposed to be some of the most sophisticated investors, did they get hoodwinked by an even more sophisticated conman or are they just colossally more stupid and failed to do basic due dilligence?
Though wildly speculative on my part, I can see a more cynical reason that would explain these seemingly incomprehensible actions. That is that Softbank knew Neumann was a conman from the start and they invested in him because he was conman. Why would they do that? Because the VC game has changed a lot in the 20 years since the first dotcom wave. Early stage VC firms no longer bet on making money from the long term health of the company. They can get their returns by selling to later stage VC firms. So it doesn't matter to them if the company's business model is bogus. They only need the company to generate enough activity and growth metrics to inflate the valuation into the stratospheric level and then dump it on late stage VC investors and then the public as the company makes its IPO. In this way it's not much different than a classic ponzi scheme. And in that case it's in Softbank's interest to find a conman who can pull off the charade long enough and well enough for them to make their exit.
The counter argument to that is Softbank didn't sell off a meaningful part of its position before WeWork filed its S-1. That's when everything really fell apart -- when the internal financials of the company were exposed and everyone could see what a house of cards the company was.
In that case maybe Softbank did get taken in just as everyone else did. Or maybe they just didn't expect Neumann to fumble the exit as badly as he did.