SoftBank has a facility to grant up to $ 20 billion in loans to its employees, including CEO Masayoshi Son so that the capital can be reinvested in SoftBank's own Vision Venture Fund. This emerges from a new report by the Wall Street Journal. This is an extremely unusual step that could be risky overall in terms of the SoftBank Group's involvement in its start-up operations. The benefit, however, is that it can potentially fill up to one-fifth of its newly announced second vision funds, with a total target increase of $ 108 billion from a highly focused investor pool.
SoftBank announced plans for its second Vision Fund last month, including $ 38 billion from SoftBank itself and commitments from Apple, Microsoft and others. The company also took a similar approach to the original Vision Fund, reports WSJ, which provided $ 8 billion in loans to employees for this $ 1
The potential amortization is high, provided the fund has some solid winners. This results in liquidation events that generate high returns that allow employees to repay the original loans and get away with a profit. However, this is definitely a risk, especially for the current global economic customer. WSJ notes that the Uber portions of the Vision Fund I acquired are now worth less than what SoftBank originally paid them, and the SoftBank bet that WeWork is ready to be another company whose IPO may not bring so much, if any, money for future investors.