After Vision Fund invested $375 million in Zume Pizza Inc., whose mission to use robots to automate pizza making had shades of Silicon Valley frivolity, CEO Alex Garden expanded his mission to include rethinking the entirety of U.S. food production. Employees were unnerved. “Are we the next Theranos?” went one anonymously submitted question at an all-hands meeting over the summer. Afterward, Zume banned anonymous questions at the meetings. (A spokesman says the company has always “strived for transparency” and has a different way for employees to submit anonymous questions.) Three months later, Zume has yet to revolutionize food production or to be profitable.
I can't think of a bigger red flag than asking yourself "Are we the next Theranos?"
During all that adroit dealmaking, the fund’s workplace culture was steeped in vintage Wall Street macho belligerence. In early 2017 the Vision Fund’s Zambia-born chief financial officer, Navneet Govil, told a Mormon employee to “go back to Utah to get more wives.” The employee left the company. Via a spokesman, Govil denies making such a statement. Around that time, Govil also berated a young accountant in front of a group, bringing her to tears. She later quit. And at a work lunch a few months later with several colleagues, Govil remarked that “Chinese people sound stupid,” according to two people who heard the comment. Via a spokesman, Govil denies making such a statement or berating the employee; SoftBank says it has no record of these events.
Glad to see all of those Wall Street fuckwits managed to find jobs in the Valley.
When the fund takes a stake in a startup, then invests again at a higher valuation, it often books a profit on its original holding. This is legal, even though no actual cash has flowed into its coffers. Much of the Vision Fund’s profit in the second quarter of 2019, for example, was on paper, the result of valuation spikes for Oyo, DoorDash, and communications appmaker Slack Technologies. “It may pass the accounting standards test, but it doesn’t pass the common sense test,” says Aswath Damodaran, a professor of finance at the New York University Stern School of Business and author of four books on valuing businesses.
How the fuck is that legal?