Adobe is buying Figma for around $20B, WSJ reported. WOW! This is a big deal for startup investors. According to PitchBook, their most recent financing happened in June 2021 with ~$10B valuation and investors paid $21.3 per share. Also according to PitchBook, seed investors paid $0.08 per share back in 2013 and series A investors paid $0.2 per share back in 2015. The acquisition is allegedly priced at ~$20B. Let’s say Adobe paid $40 per share. This means the seed investors 500X’ed their money and series A investors 200X’es their money. Congratulations to Index Ventures (Seed Lead Investor) and Greylock (Lead Series A investor) for making the great pick early and helping Figma become the ubiquitous tool for web design. All the designers I worked with use Figma and many designer turned investors invested in Figma. I am so happy for them.
This is one of the main reasons I love investing in startups. No, it’s not about 500X or 200X the original investment. It’s about changing the world. The investment return is a measurement of how much the world has been changed due to a particular startup. Most startup founders try super hard to change the world but ultimately fail. Some do make it work and have a vibrant business. But occasionally, we see a unicorn like Figma that creates a new category or transforms a profession or an industry. If I were to be completely honest, a lot of times it’s hard to tell in the beginning. But I do notice that having great people in the founding team is a necessary condition (but not a sufficient condition) for great successes.
I have invested in a handful of unicorns. All the unicorns I have invested so far have pretty unique founders. I can even tell you who will become unicorns in the next few years if they have reached the product market fit. My observation has been that they are resourceful, high energy, great at execution and are inspiring in their own unique way. As an investor, I don’t aspire to have insights for all the industries (but it is a personal passion of mine to understand how the world works). I do aspire to be able to identify the seed of an innovation when I cross paths with inspiring founders who work hard to make the world a better place.