2 ms·

> I can't blame anyone for seeing $20 Billion dollars upfront and taking the offer, but did Figma even need to sell in the first place? It's a great question f

> I can't blame anyone for seeing $20 Billion dollars upfront and taking the offer, but did Figma even need to sell in the first place? It's a great question from a P&L standpoint, but like you said: the board of the company represents the shareholders, and it's likely that $20 billion was a number _far_ above what they viewed the company's value - therefore accepting that type of deal would've made 100% sense to maximize return for those investors. Note that many employees are also shareholders, and therefore would've banked quite a bit of $ if this went through. I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? EDIT: after some quick searching, estimates place the value of Figma at $8-9 billion...making the offer of $20B virtually impossible to reject.

deaddodo 3y ago
> I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? Because Figma would have undoubtedly rejected at or near market rates. And regulators were already iffy. Being overly generous, if it still will pay off for you in the end, is a good way to grease a lot of wheels. The best analogy is the person who offers to pay 25k over asking (in a market where that is abnormal) on a house they definitely want to bypass the whole secondary negotiation process.
- radley 3y ago
  Figma actually did reject many offers at market rates. $20B was too good to pass up, particularly with the $1B cancellation fee.
no_wizard 3y ago
IPO is another way to return to shareholders though, as is making a profit and paying a percentage of those profits via dividends to shareholders, which any private company can do, or using those profits to do share buybacks. There's any number of ways to benefit the shareholders. Its not anything you said per se, I'm simply annoyed at the legal maxim that we must maximize shareholder value whenever presented to do so, as long as its not an illegal activity.
- clintonb 3y ago
  If you give me the option to more than double my money now versus get dividends over the next few years, I'm taking the money now. The goal of most businesses is to make money. Building with a focus on longevity is just one of many ways to achieve that goal.
  - kelnos 3y ago
    That sounds a little like the delayed-gratification experiments where they tell children they can have a single candy bar now, but if they wait a half hour, they can have two. In general I would take the dividend, if the expected value over that time was greater than the immediate lump sum, plus what I might get for investing that lump sum in something over those few years. And in reality it's usually not over just a few years; the dividend is long-term. I'd much rather build something valuable and get steady income from it than build something to flip. Now if the risk of no dividend payout is high enough, I'll take that lump sum. But I feel like those sorts of deals -- huge money now, or very risky, uncertain money over a number of years -- just aren't really a thing that often.

deaddodo 3y ago

> I think the better questions are: did Adobe _need_ Figma? (We'll see...) and why did Adobe overpay by so much? Because Figma would have undoubtedly rejected at or near market rates. And regulators were already iffy. Being overly generous, if it still will pay off for you in the end, is a good way to grease a lot of wheels. The best analogy is the person who offers to pay 25k over asking (in a market where that is abnormal) on a house they definitely want to bypass the whole secondary negotiation process.

radley 3y ago
Figma actually did reject many offers at market rates. $20B was too good to pass up, particularly with the $1B cancellation fee.

no_wizard 3y ago

IPO is another way to return to shareholders though, as is making a profit and paying a percentage of those profits via dividends to shareholders, which any private company can do, or using those profits to do share buybacks. There's any number of ways to benefit the shareholders. Its not anything you said per se, I'm simply annoyed at the legal maxim that we must maximize shareholder value whenever presented to do so, as long as its not an illegal activity.

clintonb 3y ago
If you give me the option to more than double my money now versus get dividends over the next few years, I'm taking the money now. The goal of most businesses is to make money. Building with a focus on longevity is just one of many ways to achieve that goal.
- kelnos 3y ago
  That sounds a little like the delayed-gratification experiments where they tell children they can have a single candy bar now, but if they wait a half hour, they can have two. In general I would take the dividend, if the expected value over that time was greater than the immediate lump sum, plus what I might get for investing that lump sum in something over those few years. And in reality it's usually not over just a few years; the dividend is long-term. I'd much rather build something valuable and get steady income from it than build something to flip. Now if the risk of no dividend payout is high enough, I'll take that lump sum. But I feel like those sorts of deals -- huge money now, or very risky, uncertain money over a number of years -- just aren't really a thing that often.