[thebradbain]

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.

[tgma]

> We’re forgetting that all of FAANG IPOd when they too were much less than $20 billion

We are forgetting that because... well, it ain't true. Facebook was way over $20B at IPO. Google was close but still higher.

[thebradbain]

TIL, wow. Thanks for clarifying.

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.

[tgma]

I personally don't believe the valuation is far off or unreachable, but someone giving you a valuation that you have the potential for in the future today with zero risk and low pain is still quite different than having to work your way through justifying it.

In addition, once you announce to employees that the company is getting bought, the culture changes drastically in ways that are not favorable to independent continuation, for better or worse.

That said, the $1B cash infusion must be nice enough to soothe most of the pain. I wish and expect them all the best should they deploy that cash wisely.

[SilverBirch]

And inflation since 2004 means a $23Bn IPO for Google in 2004 is like a $37Bn IPO today.

[low_common]

What is Figma doing that is worth an IPO?

[thebradbain]

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.

https://corpgov.law.harvard.edu/2017/05/18/looking-behind-th...

[kaliqt]

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.

[DANmode]

Being one of few publicly known low-code or no code tools that exposes code?

Leaning into that with a new feature right now, actually.

[killingtime74]

There are lots of small listed companies. Bar to IPO is not high

[photonbeam]

They could direct list publicly, no need to raise capital

[azemetre]

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.

[caslon]

"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.

[thebradbain]

?

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.

[caslon]

The IPO isn't a guaranteed thing, look at WeWork. Further, an IPO isn't immediate.

This nonsense took people from millionaires to "I don't know, let's Let The Market Decide (but not any relevant participants, only speculators)."

An exit is a one-and-done. You can do whatever you want with the money, it's yours.

An IPO means you're locked into a potentially-doomed company for three months after, solely for the good of people who did nothing to deserve anything.

Look at the VA Linux IPO; it took people from on-paper millionaires to completely broke in just the window of not being allowed to part with shares. Six months for Facebook RSUs.

This putting aside the potential privacy risks inherent to the IPO process. Have 5%? Guess what's now public knowledge? Some S-1s even list shareholders with fewer than 5%.