If the vast majority of a VC’s ultra-risky investments fail (this is generally true, though usually somewhat less true at the “late-stage investments of billions” stage, hence WeWork being an interesting example), that would imply that there’s little reason to assume VCs are any good at reading financials; it won’t impact their business that much.

WeWork is IMO fairly strong evidence that SoftBank is, or at least was, either incompetent here or simply not looking at all.