SoftBank is suing portfolio company IRL after it admitted 95% of its users were fake. VCs are stressing the need for ‘uncomfortable’ due diligence::undefined
How is it uncomfortable verifying how many customers you have? As someone who works in the legal sector I am staggered by how many anyone nebulous software companies are bought without the buyer conducting minimal due diligence like a review of the top 20 customers.
“If you’re a teen in America, then you probably are familiar with a messaging app called IRL. The rest of you likely are not—aside from some big name tech investors keen to shower the startup with a large new funding round.”
Even the journalist believed the lie. Nobody checked with the teens!
I’ll be blunt: if a large bank is stupid enough to invest money in a company that’s basically vaporware, and they invest because they were far too lazy to do any real due diligence, that’s on the bank.
Just to clarify, SoftBank is not a bank.
Yeah, they make Link Amps
It’s never a bad day when tech VCs lose money
This is literally the GoJo plot in Succession lmao
