You Should Think Twice Before Taking a Huge Amount of VC Money. SoftBank’s Very Bad Year Is Proof

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On this week’s episode of the Inc. Uncensored podcast, we got to talking about what’s shaping up to be Softbank’s no-good, very bad year. So many massive bets–and an increasing number that just aren’t panning out.

WeWork might be the most outrageous example, but there are others. There’s Wag, the pet care and dog-walking app that last year accepted $300 million from Softbank’s $100 billion Vision Fund. As part of the deal, co-founder Josh Viner stepped down as CEO and was replaced by former CEO of security company LifeLock, Hilary Schneider.

Last month, a former Wag employee told CNN Business: “Senior leadership was disengaged from the company and product and didn’t have a good understanding as to the strategy needed to make it viable long term.” The company is reportedly looking to sell for less than the $300 million investment Softbank initially made, according to Bloomberg.

Then, there’s Fair.com. The three-year-old car-leasing startup landed $385 million from Softbank almost a year ago. It made Inc.‘s Best Workplaces in America list in June. And then, last week, it laid off 40 percent of its workforce in an effort to encourage profitability. On Wednesday, the Wall Street Journal reported that co-founder and CEO Scott Painter (a former Inc.com contributor) is following them out the door, to be replaced on an interim basis by Softbank operating partner Adam Hieber.

There are also plenty of examples of high-valuation startups that have stumbled after much-hyped IPOs. Inc. executive director of editorial Jon Fine summed it up neatly during our podcast: Too many startups are taking too much money and over-focusing on growth as a result. It’s a larger trend outside of Softbank-backed companies, and certainly influenced by Softbank’s mega rounds.

It made staff reporter Lu Gonzalez recall a great scene from Silicon Valley that, in my opinion, is perfect for this moment. In the HBO show’s season two premiere, protagonist Richard asks an entrepreneur named Javeed, “What if you had asked for less?” The stunned Javeed, recently fired from his startup due to a hugely inflated appraisal, responds: “Can you even do that?”

It’s a funny joke. And right about now, it’s also a pretty wise question.