The Twenty Minute VCFigma's 250% Pop - The Greatest IPO Mispricing Ever? Meta & Microsoft Blowout Quarters: Broken Down
At a glance
WHAT IT’S REALLY ABOUT
Figma’s IPO pop, founder incentives, and AI-fueled market cycles explained
- Figma’s 250% first-day pop is framed less as “$3B left on the table” and more as a structural outcome of IPO bookbuilding, scarce float, and post-pricing demand that was not actually accessible at higher prices during the roadshow.
- The group explains how the night-before pricing meeting becomes a high-stakes negotiation over both allocation (hedge funds vs. long-only institutions like Fidelity) and price, with founders ultimately choosing a tradeoff between a controlled pop and investor composition.
- They argue CEO compensation is “broken” because RSUs encourage risk aversion, peer-benchmarking can be irrelevant for founder-CEOs with massive net worth, and performance packages tied to stock-price targets can be accidentally “hit” due to IPO euphoria rather than execution.
- Founders are urged to consider going public while public markets may offer cheaper capital and better liquidity than late-stage private markets, with the claim that VCs can be more intrusive than most public shareholders and activist incidents are relatively rare.
- Across Meta/Microsoft and major AI financings, the conversation highlights a tension between enormous AI CapEx and still-limited app-layer revenue today, predicting periodic shakeouts while the long-term platform shift remains real.
IDEAS WORTH REMEMBERING
5 ideasThe “money left on the table” narrative often misunderstands IPO demand.
They argue no one was bidding at extreme prices (e.g., $80–$100) in the actual IPO book; the higher trading price emerged after the IPO priced low enough to clear allocations, then retail/FOMO demand rushed in.
IPO mispricing is partly a byproduct of optimizing for investor base, not just maximizing price.
Founders commonly accept a modest pop to secure long-only anchors (Fidelity, T. Rowe, Wellington) and avoid a hedge-fund-heavy cap table, because that investor mix can matter for stability years later.
Float size and secondary-heavy offerings can amplify first-day pops dramatically.
With few shares available and huge oversubscription, even a “normal” allocation strategy can create a supply/demand mismatch that produces an outsized jump once trading begins.
Direct listings may not prevent “mega pops.”
Even with SEC rule changes allowing capital raises in direct listings, they suggest valuation anchoring would likely still start near the institutional-clearing level, with exuberance potentially showing up after trading starts.
CEO comp design is drifting toward recreating options—sometimes badly.
RSUs act like near-cash and can reduce risk-taking, while PSUs attempt to reintroduce performance incentives; but stock-price-triggered PSUs can be accidentally satisfied by market multiple expansion, undermining the intended pay-for-performance link.
WORDS WORTH SAVING
5 quotesRun, Forrest, run. The market's wide open. The valuations are good. There's a lot of demand. It's very seasonal and, um, oddly seasonal, and timing really matters. If I were Canva, it's an amazing company, I would be f- I'd be lining up, you know, lining everything up to go public.
— Brian Halligan
I can tell you right now, the people who said, "Oh, Fig- Figma left $3 billion on the table 'cause they could've got $95 a share," are talking out of their ass.
— Rory O’Driscoll
Oh, my net worth went from X to 100X. I was just, I was just happy to be there.
— Brian Halligan
VCs are a much bigger pain in the ass than public investors.
— Brian Halligan
Here's what's underrated about the IPO is it's very stressful, you're exhausted, but the day you go public is going to be one of the top two or three days of your life. It is an amazing day.
— Brian Halligan
High quality AI-generated summary created from speaker-labeled transcript.
