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In 2017, Masayoshi Son, the billionaire founder of SoftBank, launched the Vision Fund with an unprecedented $100 billion in capital. Backed by Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala, it became the largest technology investment vehicle ever created. Son promised to back the “founders of the future,” writing billion-dollar checks to fuel rapid growth. However, many of the fund’s high-profile investments including WeWork, Katerra, and Brandless collapsed. Instead of producing consistent returns, the Vision Fund became a cautionary tale about overconfidence, poor discipline, and the dangers of chasing scale over sustainability.

In this edition of Business Knowledge

• Executive Summary: How SoftBank’s Vision Fund rose and stumbled.

• Background: Masayoshi Son’s bold vision and early track record.

• The Business Challenge: Why SoftBank launched the fund.

• The Strategic Bet: How Son deployed $100 billion.

• Execution: The deals and the missteps.

• Results and Impact: What happened to the fund and its portfolio.

• Lessons for Business Leaders: Takeaways from the Vision Fund’s struggles.

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Executive Summary: How SoftBank’s Vision Fund rose and stumbled

SoftBank’s Vision Fund raised $100 billion in 2017 to invest in the next generation of technology leaders. With billion-dollar checks and rapid scaling, it aimed to dominate global venture capital and reshape how startups were financed. The size of the fund alone made it the most ambitious experiment in venture capital history.

However, many investments collapsed under weak business models and poor governance. Instead of outsized returns, the fund reported massive losses, showing that scale and hype can’t replace discipline and due diligence. The Vision Fund quickly shifted from a symbol of innovation to a cautionary tale of reckless spending.

Background: Masayoshi Son’s bold vision and early track record

Masayoshi Son built his reputation on bold bets, most famously a $20 million investment in Alibaba in 2000 that grew into more than $100 billion. By 2016, he wanted to replicate that success on a far bigger scale and saw an opportunity to dominate global venture capital. Son envisioned a fund that would let him back dozens of potential “Alibabas” at once.

Partnering with sovereign wealth funds, SoftBank raised $100 billion to create the Vision Fund. It was structured to invest in fast-growing startups across multiple industries and regions. The goal was to accelerate promising companies and make SoftBank the undisputed kingmaker of global technology.

The Business Challenge: Why SoftBank launched the fund

1. Global Ambition

SoftBank wanted to position itself as the world’s leading technology investor. Traditional venture capital lacked the scale to match Son’s outsized vision.

2. Deployment Pressure

With $100 billion to spend, the fund needed to deploy capital quickly. This urgency often led to oversized investments in unproven companies.

3. High Expectations

Investors expected Alibaba-level returns that were nearly impossible to replicate. The pressure pushed SoftBank toward riskier bets with weaker fundamentals.

4. Competitive Landscape

Rival VC firms relied on disciplined processes and targeted bets. SoftBank attempted to outspend them, rather than outsmart them.

5. Weak Oversight

Governance structures were inadequate, leaving too much power concentrated in Son’s hands. This created risks of unchecked decisions and overconfidence.

The Strategic Bet: How Son deployed $100 billion

1. Backing Disruptors

The Vision Fund targeted startups promising to transform industries, from co-working to autonomous cars. Son believed massive funding would accelerate disruption and create global winners.

2. Billion-Dollar Checks

Instead of small rounds, the fund wrote massive checks from $500 million to $5 billion. This flooded companies with cash but often distorted incentives and spending habits.

3. Growth at All Costs

Companies were pushed to expand rapidly, regardless of profitability. This “blitzscaling” approach left many businesses fragile and unsustainable.

4. Global Reach

The Vision Fund spread investments across the U.S., China, India, and Europe. While this gave it visibility everywhere, it diluted oversight and focus.

5. High Conviction

Son trusted his instincts over rigorous analysis, often overriding red flags. This led to large bets on companies with flawed business models.

Execution: The deals and the missteps

1. WeWork

SoftBank invested over $10 billion into WeWork, valuing it at $47 billion. The failed IPO and governance scandals erased most of that value.

2. Katerra

Backed with $2 billion, the construction-tech startup collapsed into bankruptcy by 2021. It highlighted weak due diligence and overestimation of potential.

3. Brandless

The consumer goods startup shut down after burning through hundreds of millions. Despite hype, it never found product-market fit.

4. Uber

The Vision Fund’s $7.7 billion stake in Uber showed some upside but underperformed expectations. Regulatory challenges and fierce competition limited long-term gains.

5. Portfolio Spread

With over 80 companies funded, oversight was stretched too thin. This lack of monitoring amplified execution risks across the portfolio.

Results and Impact: What happened to the fund and its portfolio

1. Massive Losses

By 2020, the Vision Fund reported a record loss of $17.7 billion in a single year. Several portfolio companies collapsed or saw their valuations slashed.

2. Reputation Hit

Once hailed as revolutionary, the Vision Fund became linked with reckless spending and poor judgment. Its failures overshadowed its few successes.

3. Survivors

Investments like DoorDash and Coupang delivered strong returns. But they weren’t enough to offset the scale of losses elsewhere.

4. Investor Disappointment

Backers like Saudi Arabia’s Public Investment Fund were disappointed with weak results. This strained relationships and limited future fundraising.

5. SoftBank’s Struggles

The Vision Fund damaged SoftBank’s balance sheet and credibility. Son was forced to scale back future ambitions and adopt more caution.

Lessons for Business Leaders: Takeaways from the Vision Fund’s struggles

1. Discipline Beats Scale

Deploying massive capital is meaningless without discipline. Smaller, smarter investments often outperform bigger but reckless bets.

2. Due Diligence Is Essential

Governance and thorough vetting are crucial to avoid costly mistakes. The Vision Fund’s failures showed the cost of skipping this process.

3. Growth Must Be Sustainable

Expansion without a path to profitability creates fragile companies. Many Vision Fund-backed firms grew fast but fell apart just as quickly.

4. Concentration of Power Is Risky

Relying too heavily on one leader’s instincts increases organizational vulnerability. SoftBank’s dependence on Son amplified risk.

5. Success Can Breed Overconfidence

Son’s Alibaba success created unrealistic expectations. Past wins cannot guarantee future results, especially when fundamentals are ignored.