That is wild. It's a good thing as it means Adobe won't ruin Figma like they did with so many great software products before, but just imagine founders, investors and employees, thinking they had a really good exit.. That must hurt, I hope they can stay motivated. If Adobe can't buy them, what other exit options do they have? Go public?
What's wrong with selling goods and services for more than they cost?
Unfortunately taking investment means you are accountable to their interests, not just your own. This includes the employees whose investment was opportunity cost.
(ex-Adobe, on a team highly related to an area where Figma out-executed XD, less knowledge about genAI stuff) > Adobe has probably captured back both mental and market share from Figma GenAI/Firefly's success is in a totally different domain to what Figma's doing. Figma's equivalent at Adobe is XD, which has never held a candle to Figma. The existential problem Adobe tried to buy their way out of still exists in the…
Curious: would you say that's reflective of Adobe's dev culture as a whole? I heard some similar comments coming out of a (claimed?) Lightroom developer about the motivations for that project...
Also ex-Adobe, worked directly with regulatory compliance in my role there. Adobe is a huge company with a diverse set of dev team cultures, but is a monoculture in regards to legal and regulatory compliance. They do not fuck around. (They're also very serious about security post-2013.)
> Broadcom & VMware merger took similarly long and was approved. The duration is completely unacceptable and poison to business The number of such mergers, globally every year, is countable on two hands. They involve the wealth of nations (this one’s similar to Malta’s GDP [1][2]). It would be unreasonable to permanently staff the regulatory force that would be required to quickly review such deals in any industry. […
I don't understand. If there are several per year, and they're going to take a couple months even at maximum speed, then permanently staffing the regulatory force sounds very reasonable to me! (For the US and EU which are going to weigh in on a big fraction.) Why would you want to be hiring and firing constantly?
> permanently staffing the regulatory force sounds very reasonable
There are permanent staff. There are also legions of industry experts contracted on a case by case basis. Full staff on standby would mean having, on retainer, experts in every industry where a merger might happen.
While I do see this as great news (for all the reasons others have outlined), I wonder how this will impact VC in the future; If the current goal is for companies to get VC money, burn that cash for years and years and years, and then have a huge IPO or acquisition (that makes it all worth it), it would seem regulatory issues would start to scare away investment.
100% agree. I thought similarly with Plaid and Visa. It feels like it will stifle competition because it's now harder to get funding. Back when Facebook and Google were making so many acquisitions, it seemed like money was just flowing. Bad for competition. Good for incumbents.
There are permanent staff. The issue of time isn't any individual regulator - it's that there's regulators in every country they operate in. And the company is negotiating with them all simultaneously - figuring out what would make the EU say yes, and then taking that to the US and see if that will let them say yes, then going to Japan and making sure they'll say yes, then going to India - and you don't want some of…
Once they get working on it, I would think they could get consultation and competitor briefs back within a month. Then have an initial answer within two months of the announcement, and if that answer is a "no" they'd have a good idea of what would need to be changed. And I don't see a great reason that negotiations should more than triple that amount of time. If they're not budging, make the "no" final. So two months…
There are permanent staff. The issue of time isn't any individual regulator - it's that there's regulators in every country they operate in. And the company is negotiating with them all simultaneously - figuring out what would make the EU say yes, and then taking that to the US and see if that will let them say yes, then going to Japan and making sure they'll say yes, then going to India - and you don't want some of…
Once they get working on it, I would think they could get consultation and competitor briefs back within a month. Then have an initial answer within two months of the announcement, and if that answer is a "no" they'd have a good idea of what would need to be changed. And I don't see a great reason that negotiations should more than triple that amount of time. If they're not budging, make the "no" final. So two months…
> If they're not budging, make the "no" final. So two months initial, six months max, would be good numbers
A CEO also owes it to their employees and investors to let everyone have a massive payday.
Do you actually believe that, or are you mocking a bit of startup-culture hubris?
I’m about as anti-consolidation as someone can be, but I’m not about to blame a CEO for selling when you’re offered a price way above any realistic valuation. I put this at the feet of Adobe and regulators, not the guy taking the biggest payday opportunity possible for his employees and shareholders.
That is wild. It's a good thing as it means Adobe won't ruin Figma like they did with so many great software products before, but just imagine founders, investors and employees, thinking they had a really good exit.. That must hurt, I hope they can stay motivated. If Adobe can't buy them, what other exit options do they have? Go public?
They just got a billion dollars as a breakup fee. A billion dollars could be: $500M to early investors, $250M to the people that built the company, $400k each for anyone employed before the merger announcement, $100k each for anyone hired since, $50M under a pillow for safekeeping. And that's without needing to give up ownership. Is that not a good 'exit'?
All of their rounds have added up to $333M; most of that is in the past 3-5 years; the early investment rounds were very tiny. $500M on $333M isn't the home run that the investors were looking for, but maybe in today's environment may be the best they can hope for. That said, they may not want to set that precedent.
While I do see this as great news (for all the reasons others have outlined), I wonder how this will impact VC in the future; If the current goal is for companies to get VC money, burn that cash for years and years and years, and then have a huge IPO or acquisition (that makes it all worth it), it would seem regulatory issues would start to scare away investment.
I think the main effect will be to push VC funded companies more towards sustainable growth, with less emphasis on growth at all costs. This strikes me as a good thing overall. That probably won't harm the fundraising prospects for solid businesses much if at all. Highly speculative or hyped companies will probably have a somewhat more difficult time attracting VC investors, but so many of those turn out to be frauds…
Eh, this is probably true. It was fun in the days when it was all about getting acquired by Google or Facebook, but I guess this spurred a lot of unsustainable businesses. If you were making revenue you were seen as dumb. "Lol, why would you charge money? Doesn't you know how to build a business?"