In Real Life

A "serial founder" finds a serial sucker in SoftBank

“I don’t look for companies. I look for founders.” - SoftBank founder Masayoshi Son

A warning for anyone charismatic enough to suck money out of Silicon Valley investors: Don’t charge millions of dollars to your company credit card to pay for ride shares, airfares, luxury hotels, Venmo payments to friends, your wedding, and other assorted living expenses.

Investors won’t like it, especially if they suspect that your startup is mostly just a bunch of bots talking to other bots in the Internet ether.

The Securities and Exchange Commission on Wednesday filed civil fraud charges against Abraham Shafi, the 37-year-old founder of a social media site called IRL – or In Real Life – alleging just this sort of folly.

You’ve probably never heard of IRL because you are not a bot. The SEC complaint alleges that as many as 95% of IRL’s purported 12 million users were likely just bots. The regulator also alleges that Shafi duped investors out of $170 million while he spent with abandon.

The victims are Silicon Valley venture capital firms, and the big loser is SoftBank, which poured $150 million into IRL.

Don’t cry for SoftBank. This is the Japanese VC giant that lost over $14 billion on WeWork, the overhyped office sharing company that filed bankruptcy in 2023.

SoftBank once boasted that its investment in IRL was the fastest check it had ever written. It should rebrand itself, Soft (In-the-Head) Bank.

Left bot: “Hi.” Right bot: “Hello.” SoftBank: “Wow, we’ll write a check.” (Illustration: AI generated.)

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