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What do you think happens to VC investments when it’s harder for companies to be acquired? If you were a founder and wanted to sell your company, would you wan

What do you think happens to VC investments when it’s harder for companies to be acquired? If you were a founder and wanted to sell your company, would you want the government telling you that you can’t sell it for the best price?

bmitc 4y ago
It’s a problem that the MO of venture capitalism is just pump and dump. The only thing VC investments optimize for are exit strategies and not creating actual value. So I wouldn’t see it as a bad thing that such investments are diminished.
- scarface74 4y ago
  So who are you going to get to take their place?
vouaobrasil 4y ago
Of course not, I would be selfish and want the billion dollars. But maybe a culture of creating small companies out of VC capital only to be acquired by megacorps is not the best way forward for society. I also don't like paying taxes, but that doesn't mean there shouldn't be any.
- robbiemitchell 4y ago
  Figma turned ~$330M in investments into a $20B outcome and gave countless companies a better way to do their work. How is this a bad path for society?
  - m3at 4y ago
    I think you misread, the parent agree with you that Figma created value, the issue is the acquisition by Adobe that might stop or slow this.
    - supportlocal4h 4y ago
      Perhaps you misunderstand that Figma was motivated to create value. A large part of the motivation for many startups is an exit plan wherein they get bought out by established competitors. If you prevent such purchases, you eliminate a major factor in creating the value to begin with.
      - bmitc 4y ago
        What are you are are describing are bad motivations. It’s like wanting a salary when volunteering. One doesn’t actually care about value if the only motivation to create said value is to get obscene amounts of money.
        scarface74 4y ago
        They weren’t creating a company for the “good of mankind”. Most non profits have plenty of paid staff. In fact, there is a Ted Talk about non profits and why their employees should get paid well. https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...
        bmitc 4y ago
        > They weren’t creating a company for the “good of mankind”. I feel most VC blurbs disagree with that, although of course that’s not their actual motivation. I don’t see how non-profits are relevant other than as examples of companies/organizations that do actually provide value in lieu of massive gains and profit. And I think you missed my point as I was responding to: > If you prevent such purchases, you eliminate a major factor in creating the value to begin with.
        scarface74 4y ago
        And you believe what the VCs say?
  - afavour 4y ago
    Because now that it's owned by Adobe they no longer have competition for their XD product. They will likely merge both, resulting in an inferior product. They'll then jack up the price, hurting countless companies that have gotten used to a better way to do their work. But I'm very glad they generated income for their shareholders.
  - krferriter 4y ago
    I would prefer the investors just get paid back plus ROI using the value and revenue the company generates, instead of the standard being just merging the company into a larger one.
    - scarface74 4y ago
      Well, if you would like that, you are free to start your own company, find the talent and the like minded investors and take the prerequisite risks to create a company that meets your ideals. But Figma is a private company and the founders get to choose who they sell to.
      - geodel 4y ago
        Yeah, exactly right. People here are saying "I pay 20 dollar a month for something, now whole universe must stay same forever lest that 20 dollar thing disappear"
  - mschuster91 4y ago
    I think the problem with VC that GP means is more a systemic one - it's not specific or even applicable to Figma, but for other large VC projects. It's fine if a company like Figma takes VC to build a good product that fills a niche that hasn't been explored before and uses the VC to grow and eventually exit to the general public market so that the investors get their return. It's not fine if larger companies like Adobe can simply swoop in and pay billions to get rid of a competitor, although that one should be dealt with by anti-trust agencies anyway. It's not fine if a company like Uber uses cheap VC money to price-dump against essential services - and yes, taxis are essential for those without a car, and the anti-discrimination frameworks make sure that access to them is fairly available to everyone, no matter why they would need a taxi for. Uber, in contrast, routinely got associated with everything from wage dumping over racism [1] to extorting people with excessive surge charges [2]. It's not fine if a company like AirBnB uses cheap VC money to wreak havoc on local rental markets [3][4] or to run effectively hotel-like operations in residential zones, while conveniently ignoring things such as fire codes [5], neighbors' quality of life [6], taxes [7] or that people (both guests and hosts) were and are randomly banned for "background checks" [8][9], a return of ages-old banned housing discrimination. Society definitely needs a hard regulation on anything where VC is involved. [1] https://venturebeat.com/ai/researchers-find-racial-discrimination-in-dynamic-pricing-algorithms-used-by-uber-lyft-and-others/ https://venturebeat.com/ai/researchers-find-racial-discrimin... [2] https://timesofindia.indiatimes.com/business/india-business/drivers-cancelling-the-ride-surge-pricing-top-issues-for-consumers-who-book-app-based-taxis-survey/articleshow/90718955.cms https://timesofindia.indiatimes.com/business/india-business/... [3] https://www.tagesspiegel.de/berlin/ferienwohnungen-stehen-leer-und-werden-normalen-mietern-angeboten-befristet-5063002.html https://www.tagesspiegel.de/berlin/ferienwohnungen-stehen-le... [4] https://travelnoire.com/the-airbnb-effect-on-an-already-high-cost-shrinking-housing-market?item=2 https://travelnoire.com/the-airbnb-effect-on-an-already-high... [5] https://www.nfpa.org/News-and-Research/Publications-and-media/NFPA-Journal/2018/July-August-2018/Features/The-Airbnb-Challenge https://www.nfpa.org/News-and-Research/Publications-and-medi... [6] https://www.wired.co.uk/article/living-next-to-airbnb-sharing-economy-problems https://www.wired.co.uk/article/living-next-to-airbnb-sharin... [7] https://news.bloombergtax.com/daily-tax-report-state/airbnb-targeted-by-states-suspecting-tax-collection-shortfalls https://news.bloombergtax.com/daily-tax-report-state/airbnb-... [8] https://eu.usatoday.com/story/opinion/policing/spotlight/2018/06/28/airbnb-bans-some-civil-rights-policing-usa/706148002/ https://eu.usatoday.com/story/opinion/policing/spotlight/201... [9] https://www.airbnbhell.com/banned-from-airbnb-over-background-check/ https://www.airbnbhell.com/banned-from-airbnb-over-backgroun...
- randomdata 4y ago
  What would the alternative be? There will always come a day when founders and investors want to move on. Retirement age comes faster than you might think. Even if you deny an exit strategy, the principals are still going to stop eventually, and the product will still come to an end at that time. Allowing a sale at least provides an opportunity for the product to live on, even if there can be no guarantees about how the next guy decides to treat it. Traditionally, when a product doesn't want to be lost, the customers will pool their resources together and offer a buyout. That seemingly didn't happen, so Adobe probably is the next best thing. Adobe is a public company, so the public still has the ability to shape its future.
  - joshmanders 4y ago
    > What would the alternative be? Donate it to the Earth. https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/
  - wbsss4412 4y ago
    There are always options besides selling the whole company to a giant competitor, the difference is just that you won’t get as high of a return if there are fewer bidders in the marketplace. A company like figma could have always just gone public if the founders/investors just wanted to get out.
    - randomdata 4y ago
      > A company like figma could have always just gone public if the founders/investors just wanted to get out. The company has gone public (or will shortly) and is now at the mercy of the public shareholder. Which is specifically the concern here. The worry is that the public shareholders, who aren't necessarily users and are only shareholders out of interest in profit, will see more value in squashing the product than carrying on. The users pooling resources would have been the logical buyer, to keep out of the general public with competing interest's hands, but seemingly they didn't want the company, so...
      - wbsss4412 4y ago
AlexandrB 4y ago
What's the point of VC investment if the innovative products that are funded are snuffed out by large companies? Might as well not bother and save everyone some time.
- scarface74 4y ago
  The point of VC investments by the VCs is to invest in companies and make a healthy return when the company exits. You didn’t think they were doing it for the good of society? Once any founder accepts VC funding, all of the talk about “vision” and “impact on society is also null and void”
  - krferriter 4y ago
    They can make a healthy return even if the company isn't sold off and gutted in an acquisition.
    - scarface74 4y ago
      Who are you to tell the company how much they “should” make? The company was valuable to Adobe because of “synergies”.
  - merubin75 4y ago
    I thought it was “to make the world a better place.” ;) https://youtu.be/B8C5sjjhsso https://youtu.be/B8C5sjjhsso
    - gretch 4y ago
      They did make the world a slightly place. Ppl use their tools and are happy. What’s the better alternative? That it never existed?
littlestymaar 4y ago
That's exactly what stock exchanges are for! Going public should be the norm, not being bough by a monopolist, otherwise the entire premise of what makes capitalism desirable is broken.
- scarface74 4y ago
  As a point of reference. How many companies has YC invested in? How many have gone public? How many of those are profitable?

bmitc 4y ago

It’s a problem that the MO of venture capitalism is just pump and dump. The only thing VC investments optimize for are exit strategies and not creating actual value. So I wouldn’t see it as a bad thing that such investments are diminished.

scarface74 4y ago
So who are you going to get to take their place?

vouaobrasil 4y ago

Of course not, I would be selfish and want the billion dollars. But maybe a culture of creating small companies out of VC capital only to be acquired by megacorps is not the best way forward for society. I also don't like paying taxes, but that doesn't mean there shouldn't be any.

robbiemitchell 4y ago
Figma turned ~$330M in investments into a $20B outcome and gave countless companies a better way to do their work. How is this a bad path for society?
- m3at 4y ago
  I think you misread, the parent agree with you that Figma created value, the issue is the acquisition by Adobe that might stop or slow this.
  - supportlocal4h 4y ago
    Perhaps you misunderstand that Figma was motivated to create value. A large part of the motivation for many startups is an exit plan wherein they get bought out by established competitors. If you prevent such purchases, you eliminate a major factor in creating the value to begin with.
    - bmitc 4y ago
      What are you are are describing are bad motivations. It’s like wanting a salary when volunteering. One doesn’t actually care about value if the only motivation to create said value is to get obscene amounts of money.
      - scarface74 4y ago
        They weren’t creating a company for the “good of mankind”. Most non profits have plenty of paid staff. In fact, there is a Ted Talk about non profits and why their employees should get paid well. https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...
        bmitc 4y ago
        > They weren’t creating a company for the “good of mankind”. I feel most VC blurbs disagree with that, although of course that’s not their actual motivation. I don’t see how non-profits are relevant other than as examples of companies/organizations that do actually provide value in lieu of massive gains and profit. And I think you missed my point as I was responding to: > If you prevent such purchases, you eliminate a major factor in creating the value to begin with.
        scarface74 4y ago
        And you believe what the VCs say?
- afavour 4y ago
  Because now that it's owned by Adobe they no longer have competition for their XD product. They will likely merge both, resulting in an inferior product. They'll then jack up the price, hurting countless companies that have gotten used to a better way to do their work. But I'm very glad they generated income for their shareholders.
- krferriter 4y ago
  I would prefer the investors just get paid back plus ROI using the value and revenue the company generates, instead of the standard being just merging the company into a larger one.
  - scarface74 4y ago
    Well, if you would like that, you are free to start your own company, find the talent and the like minded investors and take the prerequisite risks to create a company that meets your ideals. But Figma is a private company and the founders get to choose who they sell to.
    - geodel 4y ago
      Yeah, exactly right. People here are saying "I pay 20 dollar a month for something, now whole universe must stay same forever lest that 20 dollar thing disappear"
- mschuster91 4y ago
  I think the problem with VC that GP means is more a systemic one - it's not specific or even applicable to Figma, but for other large VC projects. It's fine if a company like Figma takes VC to build a good product that fills a niche that hasn't been explored before and uses the VC to grow and eventually exit to the general public market so that the investors get their return. It's not fine if larger companies like Adobe can simply swoop in and pay billions to get rid of a competitor, although that one should be dealt with by anti-trust agencies anyway. It's not fine if a company like Uber uses cheap VC money to price-dump against essential services - and yes, taxis are essential for those without a car, and the anti-discrimination frameworks make sure that access to them is fairly available to everyone, no matter why they would need a taxi for. Uber, in contrast, routinely got associated with everything from wage dumping over racism [1] to extorting people with excessive surge charges [2]. It's not fine if a company like AirBnB uses cheap VC money to wreak havoc on local rental markets [3][4] or to run effectively hotel-like operations in residential zones, while conveniently ignoring things such as fire codes [5], neighbors' quality of life [6], taxes [7] or that people (both guests and hosts) were and are randomly banned for "background checks" [8][9], a return of ages-old banned housing discrimination. Society definitely needs a hard regulation on anything where VC is involved. [1] https://venturebeat.com/ai/researchers-find-racial-discrimination-in-dynamic-pricing-algorithms-used-by-uber-lyft-and-others/ https://venturebeat.com/ai/researchers-find-racial-discrimin... [2] https://timesofindia.indiatimes.com/business/india-business/drivers-cancelling-the-ride-surge-pricing-top-issues-for-consumers-who-book-app-based-taxis-survey/articleshow/90718955.cms https://timesofindia.indiatimes.com/business/india-business/... [3] https://www.tagesspiegel.de/berlin/ferienwohnungen-stehen-leer-und-werden-normalen-mietern-angeboten-befristet-5063002.html https://www.tagesspiegel.de/berlin/ferienwohnungen-stehen-le... [4] https://travelnoire.com/the-airbnb-effect-on-an-already-high-cost-shrinking-housing-market?item=2 https://travelnoire.com/the-airbnb-effect-on-an-already-high... [5] https://www.nfpa.org/News-and-Research/Publications-and-media/NFPA-Journal/2018/July-August-2018/Features/The-Airbnb-Challenge https://www.nfpa.org/News-and-Research/Publications-and-medi... [6] https://www.wired.co.uk/article/living-next-to-airbnb-sharing-economy-problems https://www.wired.co.uk/article/living-next-to-airbnb-sharin... [7] https://news.bloombergtax.com/daily-tax-report-state/airbnb-targeted-by-states-suspecting-tax-collection-shortfalls https://news.bloombergtax.com/daily-tax-report-state/airbnb-... [8] https://eu.usatoday.com/story/opinion/policing/spotlight/2018/06/28/airbnb-bans-some-civil-rights-policing-usa/706148002/ https://eu.usatoday.com/story/opinion/policing/spotlight/201... [9] https://www.airbnbhell.com/banned-from-airbnb-over-background-check/ https://www.airbnbhell.com/banned-from-airbnb-over-backgroun...
randomdata 4y ago
What would the alternative be? There will always come a day when founders and investors want to move on. Retirement age comes faster than you might think. Even if you deny an exit strategy, the principals are still going to stop eventually, and the product will still come to an end at that time. Allowing a sale at least provides an opportunity for the product to live on, even if there can be no guarantees about how the next guy decides to treat it. Traditionally, when a product doesn't want to be lost, the customers will pool their resources together and offer a buyout. That seemingly didn't happen, so Adobe probably is the next best thing. Adobe is a public company, so the public still has the ability to shape its future.
- joshmanders 4y ago
  > What would the alternative be? Donate it to the Earth. https://www.patagonia.com/ownership/ https://www.patagonia.com/ownership/
- wbsss4412 4y ago
  There are always options besides selling the whole company to a giant competitor, the difference is just that you won’t get as high of a return if there are fewer bidders in the marketplace. A company like figma could have always just gone public if the founders/investors just wanted to get out.
  - randomdata 4y ago
    > A company like figma could have always just gone public if the founders/investors just wanted to get out. The company has gone public (or will shortly) and is now at the mercy of the public shareholder. Which is specifically the concern here. The worry is that the public shareholders, who aren't necessarily users and are only shareholders out of interest in profit, will see more value in squashing the product than carrying on. The users pooling resources would have been the logical buyer, to keep out of the general public with competing interest's hands, but seemingly they didn't want the company, so...
    - wbsss4412 4y ago

AlexandrB 4y ago

What's the point of VC investment if the innovative products that are funded are snuffed out by large companies? Might as well not bother and save everyone some time.

scarface74 4y ago
The point of VC investments by the VCs is to invest in companies and make a healthy return when the company exits. You didn’t think they were doing it for the good of society? Once any founder accepts VC funding, all of the talk about “vision” and “impact on society is also null and void”
- krferriter 4y ago
  They can make a healthy return even if the company isn't sold off and gutted in an acquisition.
  - scarface74 4y ago
    Who are you to tell the company how much they “should” make? The company was valuable to Adobe because of “synergies”.
- merubin75 4y ago
  I thought it was “to make the world a better place.” ;) https://youtu.be/B8C5sjjhsso https://youtu.be/B8C5sjjhsso
  - gretch 4y ago
    They did make the world a slightly place. Ppl use their tools and are happy. What’s the better alternative? That it never existed?

littlestymaar 4y ago

That's exactly what stock exchanges are for! Going public should be the norm, not being bough by a monopolist, otherwise the entire premise of what makes capitalism desirable is broken.

scarface74 4y ago
As a point of reference. How many companies has YC invested in? How many have gone public? How many of those are profitable?