FTX has filed for bankruptcy and CEO SBF has resigned. I wonder what he will do next. He has experience with a currency that holds no real-world value, he knows the easiest way to cheat is to assume the role of banker and he has so far avoided jail. Perhaps he could be a professional Monopoly player?

The lowdown

• 👎 FTX files for bankruptcy as SBF apologizes on Twitter.

• 🐭 Disney plans layoffs days after quarterly report showed excellent subscriber growth but much higher costs.

• 🧑‍⚖️ Elon Musk heads to court to defend his $56 billion pay package for his ‘part-time’ Tesla CEO role.

Flex your finance muscle 💸💪

We have made it through our VC term sheet – at least the terms that you might not be familiar with. Today we are looking at another form of financing popular with VCs.

SAFEs💰

SAFEs or Simple Agreements for Future Equity are financial instruments designed to provide funding to startups quickly and without protracted negotiations. They were introduced by accelerator  Y Combinator as an alternative to convertible notes and, generally, have the following features:

• no maturity date

• no interest rate

• a valuation cap and/or discount rate, and

• automatic conversion on any priced share issue.

Read about SAFEs in more detail here and read about the way that Y Combinator has changed the way it’s investing in startups — uncapping the amount of equity it can take at initial investment — here ($).

Featured stories

Not even SoftBank will buy SoftBank shares

SoftBank announced that its Vision Fund lost a staggering $9.9 billion in the three months to 30 September. This is the third consecutive quarter that the Fund has made a loss. Shares in SoftBank plummeted 12.7% on the announcement. 

The fact that no new share buyback program was announced by the firm is likely to have contributed to the sharp decline. SoftBank had been engaged in a share buyback program which had probably helped its share price increase by roughly 30% in October when elsewhere tech valuations had been falling.

This buyback has now been completed and with no new buyback announced, along with the huge loss, support for the share price has now been removed.

The good news for CEO Masa Son is that the media is more focused on the even bigger loss at FTX. The bad news for Masa is that SoftBank is an investor in FTX which, after declaring bankruptcy over the weekend, is almost certain to be another loser for the Vision Fund. SoftBank’s investment in FTX was approximately $100 million($), so somehow not enormous in the scheme of things — but things are definitely getting hard for SoftBank.

The content we're consuming today

• Financial Times on YouTube: Music festivals: a high-risk business.

• FT: How Hot Wheels became ‘the largest auto manufacturer out there’. ($).

Off-balance sheet items

• The FIFA World Cup starts next week and what better way to prepare for it than to watch Netflix’s new documentary, FIFA Uncovered ($).

The bottom line