Yes, this sucks for employees in the short term who thought their equity was potentially worth 2x what it is (and more importantly, liquid!). But also, if their numbers are good enough to plausibly command that price, it’s probably better for everyone, employees included in the long run, to go public? And not via SPAC, but via a real IPO.
Looking back, I think this ZIRP phenomenon of PE and VC was unhealthy (remember crypto??), unrealistic, and ultimately only benefitted a few founders, some employees, and mostly VC firms making paper gains by marking up SoftBank-esque valuations that no one actually believed.
We’re forgetting that all of FAANG IPOd when they too were much less than $20 billion. Maybe it’s time for the next generation of software companies to take control of their own destiny rather than wait for a golden parachute to buy them out.
Regardless, given the fact they were close / within the same order of magnitude as Figma, it's interesting that the prospect of them IPOing is apparently considered a nuclear option.
According to Harvard Business school (2017): the median market cap of a publicly traded company is $832m. Even at half its valuation, Figma is way, way, way above that.
Very little, but the marketing game is strong. Salesforce started as just sales, does more of a complete solution now, I always thought... wow, what a stupid thing to make so much money, but here it is.
I think Figma is the same, it captures a large part of the market and makes a lot of people reliant and pay for it.
Is it any different than DataDog, Splunk, NewRelic, Gitlab, DigitalOcean, or any of the other publicly traded saas companies?
I mean Figma seems more sticky than something like DataDog. I worked at a company that would hop from DataDog to NewRelic back and forth. It was exhausting but in the end it didn’t take much time TO switch.
"Isn't slashing ten billion dollars in market value a good thing for the people we are taking the money away from?"
Be honest, at least. It's terrible for the employees. They went from having a guaranteed payday to gambling primarily so that "the public" can have a share they did nothing to deserve.
An IPO allows every employee and shareholder to be as liquid as they like, and optimize to your individual tax and risk situation.
An exit is a one time thing. At most, you get to elect how much cash and how much converted stock you want. More likely, the company decides what that breakdown is.
If I put myself in the position of an employee, yeah, that the deal didn't went through does sucks, but at the same time, am I supposed to feel sorry for Adobe and their world domination goals being thwarted by regulatory agencies? it seems to me that if big tech had their way, they would follow the old MS path of buy and kill and just be the sole providers of whatever product they are selling.
Monopoly is good for business but it sucks for customers!
I feel bad that the employees didn't get to go from a cool startup to a huge payday, but they still get to work at the cool startup and us customers don't have to deal with Adobe's awful behavior in our UI design program.
This will be great for customers. Figma is going to have to innovate and compete more to justify their valuation in an IPO, like they have been doing with previous work on Figjam (competing with whiteboard tools like Miro, etc.) and dev mode (i.e. a reason to pay for engineering seats). This will probably also push them to work faster on generative AI design tools.
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Looking back, I think this ZIRP phenomenon of PE and VC was unhealthy (remember crypto??), unrealistic, and ultimately only benefitted a few founders, some employees, and mostly VC firms making paper gains by marking up SoftBank-esque valuations that no one actually believed.
We’re forgetting that all of FAANG IPOd when they too were much less than $20 billion. Maybe it’s time for the next generation of software companies to take control of their own destiny rather than wait for a golden parachute to buy them out.
We are forgetting that because... well, it ain't true. Facebook was way over $20B at IPO. Google was close but still higher.
Regardless, given the fact they were close / within the same order of magnitude as Figma, it's interesting that the prospect of them IPOing is apparently considered a nuclear option.
https://corpgov.law.harvard.edu/2017/05/18/looking-behind-th...
I think Figma is the same, it captures a large part of the market and makes a lot of people reliant and pay for it.
Leaning into that with a new feature right now, actually.
I mean Figma seems more sticky than something like DataDog. I worked at a company that would hop from DataDog to NewRelic back and forth. It was exhausting but in the end it didn’t take much time TO switch.
Be honest, at least. It's terrible for the employees. They went from having a guaranteed payday to gambling primarily so that "the public" can have a share they did nothing to deserve.
An IPO allows every employee and shareholder to be as liquid as they like, and optimize to your individual tax and risk situation.
An exit is a one time thing. At most, you get to elect how much cash and how much converted stock you want. More likely, the company decides what that breakdown is.
Monopoly is good for business but it sucks for customers!