I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

Question

I never understood how venture investments worked even though I studied economic science. Let‘s say WeWork for example. If they got 17 billion as an investment and are now bankrupt. Are the owners still rich or broke and blacklisted for future investments idk

In: 755

Answer 1

Yes, the owners are still rich after a bankruptcy. The largest contributor to WeWork is Softbank at approximately $7.1B. That’s a lot. Even after their WeWork losses they still have $8.9B left over, primarily ownership stakes in T-mobile and Nvidia.

Next up is Goldman Sachs at $1.8B. Assets today $1.5 Trillion. Plus additional investor funds they can bundle.

This is the basics of venture capital. Never put all of your eggs in one bucket. You have multiple projects. Each project has multiple investors. This way you share the risk. No single failure can bankrupt you. (Softbank has had string of failures lately, but they are still going).

https://app.dealroom.co/companies/we_work/

https://fintel.io/i/softbank-group

https://www.advratings.com/companies/goldman-sachs