Will Griffith had solely been two months in his job as a enterprise investor for Iconiq when he met a 19-year-old faculty dropout named Dylan Subject. This might result in one in every of his signature seed investments, in a startup referred to as Figma.
On Thursday, Figma went public with the stock popping from the $33 IPO opening value to shut at $115.50 and a $47 billion market cap. And Griffith couldn’t be extra effusive in his reward for the corporate.
“You go to one in every of these person conferences and also you’re like, there’s 15,000 folks right here and 5,000 have Figma tattoos,” Griffith smiled. From the earliest days, the founders of this firm that gives software program for designers had “a fervent want to win and ship and redefine this ecosystem.”
But in 2013 at that first assembly, co-founders Dylan Subject and Evan Wallace have been untested. And at that time, so was Iconiq. It was identified then because the very secretive wealth administration agency for a lot of of Silicon Valley’s richest tech moguls, like Mark Zuckerberg and Jack Dorsey.
Figma, nonetheless, already had a champion: Subject had been an intern at LinkedIn beneath its then CEO Jeff Weiner. Weiner was an angel investor (and acquired extra stock at later rounds, too) and launched Subject to Griffith.
“We received related to Figma earlier than we had an early fund, earlier than we had any enterprise fund,” Griffith instructed TechCrunch. The investor remembers trekking out to fulfill the founders. “It was like two guys and the canine in an condominium in Palo Alto, and so they have been engaged on these newfangled graphics and design functionality in a browser.”
The demo confirmed how mild could possibly be manipulated when enhancing a photograph in a browser. On the time, browser-based design software program, based mostly on WebGL, was revolutionary. Tech big Adobe had the graphics design market locked up with its desktop software program. “I assumed it was insane,” Griffith recalled.
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The thought was so unproven Alexis Ohanian, who was investing out of his then agency Initialized, handed on Figma when he noticed the product years later in 2016, he famous in a tweet this week. Ohanian referred to as Figma a member of his “embarrassing miss-list.”
However Griffith wrote a verify. Seed shares, by the way in which, have been priced at $0.0878 every, Figma disclosed in its S-1A. And Griffith wrote extra checks as Figma raised further rounds. The corporate raised a complete of about $332 million in enterprise funding by way of 2024, PitchBook estimates.
“We invested within the seed. We invested within the Collection A. We invested additional. We did some secondary and we additionally invested extra meaningfully a yr in the past,” Griffith stated.
Iconiq didn’t wind up proudly owning not less than 5% of the corporate, a bar that might require Figma to publicly disclose the dimensions of its stake. But it surely owns sufficient that the IPO will probably be celebrated on the Iconiq workplaces.
“One of many ways in which we rejoice is we guess what the closing day inventory value goes to be on the primary day. It’s a prediction contest across the agency,” Griffith stated. “There are some good prizes and rewards.” If somebody nails that quantity, they might wind up with a wholesome money bonus and even one thing like a visit to Hawaii.
As for the odd a part of this IPO, Griffith has some perception. Many of the inventory bought was from investors’ stakes, including Field’s, fairly than new shares issued by the corporate, the corporate stated.
“I feel it’s very beneficiant that present buyers are prepared to promote as a lot to create sufficient provide for this IPO,” he stated.
Figma’s fundamentals are so strong that the IPO was 40 times oversubscribed, based on Bloomberg, that means much more buyers needed shares than the availability obtainable.
That may be nearly as problematic as investor disinterest, Griffith defined. The most important institutional buyers received’t trouble with an IPO the place they will’t commerce a whole lot of thousands and thousands’ price of shares, he stated. And if an IPO doesn’t float sufficient shares, costs of obtainable shares might grow to be artificially inflated, that means the corporate received’t be correctly valued. Ought to costs decline after opening day, the corporate could possibly be artificially devalued as properly.
Figma’s present shareholders didn’t actually wish to promote shares at $33, Griffith stated. “We’ve been with this enterprise since 2015, and we haven’t bought a share. And we’re going to be significant patrons within the IPO,” he stated.
Nonetheless, Griffith emphasised that for Figma, IPO day is only a milestone and never an finish. “I met a younger, 19-year-old Dylan, and we cast a partnership,” he stated. He describes himself as “proud” of seeing Subject, Figma’s CEO, “proceed to simply mature and develop, however have the identical imaginative and prescient, morals, authenticity.“
Within the meantime, he says he’ll be spending Figma’s IPO day “assembly with the following era of founders.”