Live data from Hacker News

Figma and Adobe abandon proposed merger

figma.com

761–770 of 1001 posts

Re: Figma and Adobe abandon proposed merger

#761

Earlier quoted context omitted.

In practice, employee shares in a private company are not an "investment" because they can't be traded in an open market. So no, employees don't want someone else to hold the bag. Employees want a return on their investment, and the most viable way of doing that is through an exit.

That's the whole point though - employees want an exit event so they can sell their shares and have someone else holding the bag.

That seems like an odd way to frame it, imo. "Holding the bag" usually implies something negative, as in someone will be "caught" with something bad. As in the employees are looking to dupe someone into buying what they are selling. But employees, outside of company officers, do not control what information investors get about what they are buying. They can't trick anyone into buying something, although they could theoretically benefit if someone else did trick buyers.

But it's a weird take, because employees are already the ones "holding the bag". Office space, cloud compute, etc. are all sold as COGS. VCs usually have some ability to sell their shares on the private market since they can negotiate to get their capital. Employees are often the only ones which are taking an IOU for their time and effort compared to what they could get elsewhere in the market. Employees are often the lowest class of shares which get paid out last and often reliant on the board to be able to sell on the private market. Yes, the employees decided to take this offer, on good faith, that their management would look after them. They are adults who made a, theoretically, informed decision. But structurally, they are set up to be the ones "holding the bag" if things were to go wrong with an exit.

So of course they want an exit. They literally have no other choice to get a return on their time/effort than for that to happen. (or some odd third thing like private dividends, but again, they have practically no control over that happening)

Re: Figma and Adobe abandon proposed merger

#762
post #727

Earlier quoted context omitted.

One thing we could all agree is 20B for Figma is too expensive considering how the market has shifted. Figma is still solid company/business, but Adobe probably could acquire them much cheaper in today's market.

Google was too expensive for Yahoo multiple times. You should look this from a bigger time scale. Sure they were paying a lot of goodwill on the deal. But if, down the road, Figma now starts their trajectory to become an equal to Adobe it sure would have been nice to capture that market all to yourself. Like Nvidia or TSMC. For the record, I am happy this fell through since it's clear Adobe needs competition to stop…

Yes this is exactly why governments should not allow acquisitions like this

Re: Figma and Adobe abandon proposed merger

#763

Earlier quoted context omitted.

There is nothing wrong with that if that is the type of company you build from the start. VC funded startups generally want to have an exit/IPO to get a return for their investors and give their founders and employees an opportunity to cash out and de-risk. Without an exit or IPO that is a lot harder, especially for employees. It's about the expectation of everyone involved. Eventually every company needs to turn a p…

“Everyone involved” includes customers

Those should also know that this is a VC backed company that is going to try to provide a return on investment at some point.

I do think its the right outcome and better for customers, the government is doing what it needs to do.

But I still empathize with the people involved.

Re: Figma and Adobe abandon proposed merger

#764

Earlier quoted context omitted.

The entire purpose of starting a company is to get acquired. Of the literally hundreds of companies that YC has invested in, only 5 have gone public. The VC market will dry up even more if they see their chances of an exit diminishing because of an overzealous government.

I think the state of “build to be acquired” is actually pretty gross and I wouldn’t mind it being pruned back a bit. To call this “overzealous government” is a bit ridiculous. Figma being acquired by Adobe was not good for customers, in most cases the government just allows shit like this to happen, this is the exception, not the rule.

Would you want the government to step in and tell you that you couldn’t sell what you own?

Re: Figma and Adobe abandon proposed merger

#765

Earlier quoted context omitted.

> the Company will make a cash payment to Figma in the previously agreed amount of one billion dollars ($1,000,000,000) (the “Termination Fee”) within three business days following the date thereof Three business days to wire $1b, the week before Christmas. That has to be a fun phone call with the bank.

Here is how it is going to go, Adobe will tell their accountant to wire the money, the accountant will get the details from Figma. Adobe accountant will call their bank or maybe even go in to the branch. And tell them they are sending X to X. It will take a few stamps and confirmation and it will be done in about 5 mins. Some computer somewhere will go - 1 billion Adobe and + 1 billion Figma. On the bank side nothing…

There is for sure exactly defined in the paperwork where the money will go in case of x.

That was at least so when we sold our company.

Re: Figma and Adobe abandon proposed merger

#766
post #129

Earlier quoted context omitted.

> in most cases the government just allows shit like this to happen Good. Agreements should as much as possible be free between consenting parties. It shouldn't be normal to expect the government to be involved in approving things except where there's a great reason to need it.

Especially things like when a company owns the entire town and pays their workers in scrip. Both the company and worker is a consenting party, so the government should stay out of it. The problem with this ideology is that will destroy society and reduce it to ashes.

Well seeing that we are talking about software company , I fail to see where this analogy is at all relevant

Re: Figma and Adobe abandon proposed merger

#767
post #716

Earlier quoted context omitted.

I guess the parent's point was that it's better for Figma to be acquired by a company that clearly has a Figma-shaped hole in their lineup, rather than someone with a lot of existing overlap that will likely just strangle it quietly in the night.

with a company infamous for "Embrace, extend, and extinguish", I wouldn't trust MSFT to recognize a hole needs to be filled.

Microsoft has changed a lot since the late-1990s, really.

Re: Figma and Adobe abandon proposed merger

#768
post #204

Earlier quoted context omitted.

You think this is "ideology" that will cause that? > It shouldn't be normal to expect the government to be involved in approving things except where there's a great reason to need it.

We could guess or we could refer to history to here. Maybe you would rather be doomed to repeat it?

Yes because

Step 1: Adobe buys Figma

.

.

.

Step n: Adobe takes over a small town and forces people to make websites?

Please tell me how the government’s actions has stopped that conclusion.

Re: Figma and Adobe abandon proposed merger

#769

Earlier quoted context omitted.

Nope, from Adobe’s 8K filed today with the SEC: “On December 17, 2023, the Company and Figma mutually agreed to terminate the Merger Agreement and entered into a mutual termination agreement effective as of such date (the “Termination Agreement”). The mutual termination of the Merger Agreement was approved by the Company’s and Figma’s respective Boards of Directors. In accordance with the terms of the Termination Agr…

Incredible that they have $1b sitting around in cash. Wouldn't you at least put it into a bond or treasury?

I'm sure a company as big as Adobe has multiple billions in capacity on revolving lines of credit at attractive rates from a syndicate of top banks. They do have cash and short term investments of close to $8b to borrow against!

Re: Figma and Adobe abandon proposed merger

#770
post #677
post #651

Earlier quoted context omitted.

Thanks. I've sold two companies, and gotten a pressurized squeeze from a major player (which we said no to - we were profitable so didn't have runway problems), but I've never heard of dropping an offer valuation at the last minute. Nasty business!

I can give you one worse: a board member (and deal lead, from Ventures) telling me there are only 3 people on the board. 3 months later a month before the deal is supposed to close, 2 more board members come out of the woodwork and shut the deal down. No idea they were on the board. Was outright lied to. (I have the call recordings to back that up) Mind you these are top tier brand-name VCs. They hide behind their re…

ugh sorry to hear that. That squeeze I mentioned before (lowball offer at "this is what it will cost us to copy you") was, thankfully, for a company that we bootstrapped so we had no VC pushing us to close. And we bootstrapped because of my experience at my previous, VC-backed company.
Post reply on HN