Adobe got the money in the first place via skill. Photoshop has been the leading photo editing software for a generation. Hundreds of companies over decades, some with deep pockets, have tried to knock them off and have failed.

Figma didn't lose the money game, they sold out specifically to reap the money. The owners of Figma - where the profits tend to go in a business - are extracting at an epic scale. They sold out at a valuation far beyond anything sane. They won the money game big time.

Arguably, the money game is exactly what Figma was playing all along. Dylan's good at this game, as are the VCs he partnered with.

Figma's flagship product was private equity. The design tool was secondary.

Makes you wonder whether all of this makes any sense, since the end result isn't humanity ending up with great tools to assist human lives, but a select few with capital getting even more capital, to the detriment of the former goal.

You're just figuring out how the world works today?

Yes.

> Figma's flagship product was private equity.

Care to elaborate?

Photopea guy must be making large coughing noises right now.

They have not failed because they couldn’t get a great product out. They have failed because so many people are trained on Adobe products an just use those.

Yes. At an individual level, they ask the question: "Delay my deliverables a week or two in frustration as I retrain; or, pay $300". User by user, the decision is obvious: pay the ransom and move on with your life.

I did not mean it this way. The user will always ask the question: „Can i use another software for less money/more value“. Those who can will turn their back on adobe as the company is greedy and lazy. Problem is: if your company/client is a large cooperation you dont have any choice. Never underestimate professional users.

Yep. Everybody has a price.

It's not that Figma was worth $20 billion.

It's that Adobe was likely seeing subscription revenue take hit from customers that realized there's no need for creative cloud subscription.

> It's that Adobe was likely seeing subscription revenue take hit from customers

While being pummeled by public markets, and being forced to make a move that might keep shareholders from calling for blood.

This is certainly not the first time that Adobe has presented a number to Figma's board — but it has to be the biggest number yet, by far.

From Figma's position: take your chances on an IPO while the Fed is cracking skulls around inflation — or flip the bit on that liability, and cash out to a desperate Adobe?

Another interesting layer to this is that Adobe only has $5b in cash according to their balance sheet, so the overwhelming majority of this deal is probably in Adobe stock with a long vesting period. Also the deal being done in a downturn means that the difference between this and an IPO is academic in my view

> the difference between this and an IPO is academic in my view

More theatrical than academic — if both options have a risky short-term outlook, optimize for the story.

Sold for $20B? Or lackluster IPO? As GP of a VC fund, which story is going to better-enable you to raise your next several funds?

Why do you think there will be a long vesting period?

Vesting periods are quite common in employee incentives but not at all common in mergers and acquisitions.

Because it's just common sense to not want close to $20 billion of stock flooding the market in a short period of time

It’s hard to say they lost the money game when they ended up with $20B.

They can definitely fund the development of a new good product with that kind of money.