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Figma and Adobe abandon proposed merger

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Re: Figma and Adobe abandon proposed merger

#811

Post by robertlagrant »

Drakim wrote: post #114
robertlagrant wrote: post #28

Earlier quoted context omitted.

> This is so far from outlawing It's not that far. A bureaucrat will decide if you can exit the way you want to. Still want to fund this venture? > And we are soooooo far from having a shortage of tech startups. Because there hasn't been a fear of them blocking exits.

A bureaucrat also decides the amount of lead you can put in your product and sell. In fact, there are all kinds of things you can't arbitrarily do because it hurts consumers, both physically and financially. This includes strengthening industry monopolies which has time and time again demonstrated that it causes incredible harm to entire segments of society.

> This includes strengthening industry monopolies which has time and time again demonstrated that it causes incredible harm to entire segments of society

I don't think you can take a hypothetical worst case and make it apply here. You could also say that we shouldn't have governments, because look at WW2 and all the war they declared.

Adobe buying Figma wouldn't cause incredible harm to entire segments of society. It's barely even a monopoly, in that Adobe doesn't really do what Figma does already, and there is incredible potential in just making another Figma competitor if Adobe ruins Figma.

Re: Figma and Adobe abandon proposed merger

#812

Post by N3cr0ph4g1st »

dcchambers wrote: post #732

I don't use Figma or Adobe tools so I don't really know or care about this acquisition. It seems like public opinion is split - some saw this as a good thing and others as a bad thing for Figma. Who I really feel bad for is some of the early employees that just saw life-changing amounts of money vanish in the blink of an eye. I can't imagine how gutted they must be headed into the Holidays. Obviously that value isn't…

Good fuck em. They dangled this deal in my face why I was interviewing with figma and at least the people I dealt with were so sure it's a done deal.

Lame

Re: Figma and Adobe abandon proposed merger

#813

Post by vlovich123 »

gkoberger wrote: post #784
vlovich123 wrote: post #775

I think this is great. Figma gets a free undiluted infusion of 1B cash. I’m surprised break-up fees aren’t negotiated as an investment instead of a pure cash transfer. Sure it may have impacted company focus, it didn’t impact their revenue that much (1.5x growth vs 2x growth in previous years although that could have also been caused by an adverse economic climate with sales slowing across many companies and industri…

It could be negotiated as an investment, but that only benefits Adobe. Figma wouldn't want it (would you want your biggest competitor to be an investor? they'd have information and leverage you wouldn't want them to have), and it defeats the purpose of a break-up fee (Figma negotiated for it because they didn't want to spend a year of their lives focusing on something that would benefit their competitor if it's all f…

Being an investor doesn’t necessarily entitle you to information/leverage. For example, Apple earlier had plenty of board members from competitors & they would excuse themselves from certain discussions. Similarly, an investment doesn’t guarantee you a board seat. So there’s all sorts of ways to structure things and it’s all a negotiation (e.g. the break up fee could have been a 2B investment instead or something).

Anyway, I agree this turned out phenomenally well for Figma and if I were an employee I’d be really happy about how this all turned out both for Figma and the industry (modulo the delay in cashing out).

Re: Figma and Adobe abandon proposed merger

#814

Post by mrandish »

mkl wrote: post #711
mrandish wrote: post #664

Earlier quoted context omitted.

I was referring not to just valley tech startups but investing in new small businesses overall. Per the U.S. Gov Small Business Administration: > "Despite the jobs lost during the recession, large businesses generated 6.7 million net new jobs over the past 25 years. During the same period, small businesses generated 12.9 million net new jobs, meaning small businesses have accounted for 66 percent of employment growth…

That's about the size of the business, not about being new and rapidly growing. I think the large majority of small businesses are not startups.

> "18% of small businesses fail within their first year, while 50% fail after five years and approximately 65% by their tenth year in business. This information is as per the Bureau of Labor Statistics."

https://www.chamberofcommerce.org/small-business-statistics/

Combined with the long-term (25-year) data I cited further above, this indicates the majority of small businesses are started up recently. The pool of small companies is constantly turning over and refilling with new startups - of which the vast majority die in less than ten years and a very few grow to be large companies (thus no longer counted in the pool). By definition, the shape of the small business pool must be a very slender, very long curve when graphed by employee count.

I think the tech community has perhaps a different set of connotations associated with the term "startup" than the non-tech, non-valley populace. The vast majority of startups (ie small companies started in the past five years) aren't technology companies and aren't fast growth. Yet there are so many of them, they comprise two-thirds of new job creation. Even better, many of these newly created jobs are entry-level, don't require advanced degrees or rare skills and don't require relocation to costly and crowded urban centers.

I think this misconception of small businesses is pretty common in the high tech community. Before I was a tech entrepreneur in the valley, I started out as a non-tech entrepreneur far from the valley. Then I was a tech entrepreneur far from the valley, in a mid-western U.S. state. Despite being in the fairly large state capital, the largest regional newspaper wrote a story about "Tech Companies Here in the Capitol", citing my software startup and the local Radio Shack store as the only two :-). Yet the local Chamber of Commerce, Small Business Administration and entrepreneurship clubs were overflowing with pre-launch and just launched new startups ranging from a new kind of farm animal feed distributor to sandwich shops to (non-franchise) local restaurants to karate studios. Together these small businesses employed thousands of people in a city whose population could probably all fit within a few square blocks of NYC.

I also want to point out, the organic, diverse, self-renewing nature of small business reality outside the tech, valley, urban bubbles is incredibly encouraging. As much as I love tech (and how rewarding it's been for me personally), I'm thankful the fickle, boom/bust, incestuous nature of high-tech startups is statistically the rare exception of new companies being started which drive new job creation.

Re: Figma and Adobe abandon proposed merger

#815

Post by mattmaroon »

whimsicalism wrote: post #620
JumpCrisscross wrote: post #506

Earlier quoted context omitted.

> If I was the board I’d be calling for the CEO’s head after loosing $1 billion for absolutely nothing The Board signed off on the deal. Given Adobe’s stock is up for the day, I don’t think shareholders are crying over this termination fee.

investors probably figured this out on Dec 13, not today

Are you implying the dip then was due to insider trading? That’s a big charge.

Re: Figma and Adobe abandon proposed merger

#816

Post by ThomPete »

fauigerzigerk wrote: post #808
ThomPete wrote: post #776

Earlier quoted context omitted.

You don't have to buy it. That's the reality. You can go through the numbers yourself. Adobe doesn't have network effect or anything like that. Just to give you the numbers: Adobe Creative Cloud, which includes Photoshop, has over 22 million subscribers. Thats 1/5 of Canva users. You guys are simply factually wrong.

>You don't have to buy it. That's the reality. [...] You guys are simply factually wrong. It's the argument and the conclusion that I don't buy, not your (and Adobe's) carefully selected set of facts. Here's a very big player in the graphics software market that tried to buy a potential strategic threat out of the market. This is the fact that matters in my view. I wouldn't let the top 5 in any market buy another com…

Again that's not how antitrust regulation works. I am not sure why you keep repeating the same mistake.

Figma have 3 million users. In what world would a purchase of them be dominating Canva with 135 million monthly users and with 16 million paying subscribers.

You are confusing Adobe being a big company with why they are a big company.

Re: Figma and Adobe abandon proposed merger

#817

Post by DoesntMatter22 »

coldtea wrote: post #777
DoesntMatter22 wrote: post #624

Earlier quoted context omitted.

Things happen quickly and AI will change things quickly. Figma is nearly 8 years old and Firefly isn't even a year old. Of course a massive tool is going to be bigger than a very new tool and there is a lot of momentum at companies. The future is going to be AI/prompt based because it's a 100x speed savings. Who wins that pie is up for debate but Figma as it stands right now is very disruptable.

> Things happen quickly and AI will change things quickly. Yes, but oversold hype also dies quickly, not changing much in the end.

That is a very silly way of viewing things. AI has already dramatically change logo creation and all sorts of image generation. The impact on design is already being felt and is going to rapidly increase.

The cost savings are immense.

Re: Figma and Adobe abandon proposed merger

#818

Post by Earw0rm »

amrocha wrote: post #731
hn_throwaway_99 wrote: post #631

Earlier quoted context omitted.

I don't disagree with what you're saying, at all, but the implication is still basically "And employees want someone else to be a bag holder, too!" And having been in that position several times, I definitely don't blame them! Employees also have the much tougher constraints that they can't diversify their employment like VCs can diversify their investments. But still, it's the same dynamic that people want to get ri…

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.

Yep, shares are part of the comp package, it's entirely natural that employees want to turn the fruits of their labour into liquid cash at some point.

There is a valid argument that that's a perverse incentive, and that companies should just pay employees better to begin with, or have various longevity/performance-associated bonuses, but if the company isn't profitable, share value is perhaps the best way to represent that.

And on top of that, employee share schemes tend to get very favourable tax treatment. So overall "skin in the game" is no bad thing, the problem is that, in many/most cases, an exit is the only way you're going to get your skin back out of the game.

Re: Figma and Adobe abandon proposed merger

#819

Post by mathattack »

vlovich123 wrote: post #775

I think this is great. Figma gets a free undiluted infusion of 1B cash. I’m surprised break-up fees aren’t negotiated as an investment instead of a pure cash transfer. Sure it may have impacted company focus, it didn’t impact their revenue that much (1.5x growth vs 2x growth in previous years although that could have also been caused by an adverse economic climate with sales slowing across many companies and industri…

Making it an investment could be tripped up by whatever might trip up a merger. It’s also more difficult to value the investment. (How much equity should they give up? Same valuation as the implied purchase?)
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