The Controversy Behind Figma's IPO and the Physics of Liquidity

The biggest question for many acquainted with the Figma IPO remains to be "Who actually got paid?" To understand that, we will have to break down each aspect of this company's fruition to >$50 billion valuation.

To give context to the unacquainted, let's start from the very end.

On the morning of July 31st, 2025, a browser-based design tool did something IPO bankers dream about and public-market risk managers quietly dread.

Figma priced its shares at $33, opened around $85, and closed the day at $115.50. In one trading session, a company that regulators had effectively capped at a $20B acquisition two years earlier, "briefly traded at an implied ~$56B–60B valuation on an intraday basis."

There was a DJ outside the NYSE, designers posting memes, VCs refreshing brokerage apps like kids at a raffle. It looked like a feel-good tech comeback story: Regulators protect competition, the independent upstart thrives, employees get rich, and the appearance of broader access briefly emerges.

Scratch the surface and Figma's IPO is something else entirely.

It's a diagram of how modern liquidity really works. Who gets exits, on what terms, and who shows up as exit liquidity for whom. If you care about what IPO Genie is building, which is opening the private stretch where value is actually created, Figma is not a random headline. Rather it is a case study in the system we're trying to route around.

Let's walk through the arc, then extract the parts that matter for anyone thinking about participating in, or rebuilding, that system.

From WebGL Toy to $20B "Anti-Adobe"

Figma starts as a WebGL experiment funded by a Thiel Fellowship. Two kids realise that if you can do serious graphics in the browser, you can do Photoshop-level design entirely online, multiplayer, and hardware-agnostic. No installs, no lock-in, "Google Docs for UI."

For a while it's just another promising SaaS curve.

Reconstructed revenue arcs suggest something like:

• 2017: under $1M
• 2018: a few million
• 2019: mid-tens of millions
• 2020–2021: the pandemic hits, distributed teams go full-remote, and Figma quietly becomes the place where PMs, devs and designers actually meet.
• 2024: $749M in revenue, up 48% year-on-year; Q1 2025 grows another 46% to $228.2M.

The valuations track the classic late-2010s SaaS rocket:

• Seed at a few tens of millions.
• A-B rounds into low nine-figure valuations.
• By 2021, a $200M round at a ~$10B valuation.

If you're an early investor, the compounding is largely done before Figma becomes a Tech household name. If you backed the seed at ~$16M and held through the $10B round, you're already up ~600x on paper, before any public ticker called FIG exists. This pattern of private compounding is exactly what we explore in the pre-IPO playbook.

This is the first important point for IPO Genie's audience.

By the time the public even starts arguing about whether Figma is "worth" $20B or $60B, the real game has already played out between 2013 and 2021, in private term sheets, opaque secondaries, and cap table PDFs almost no one outside the circle ever sees.

The IPO will decide who gets the last slice of upside, or who absorbs the downside. It does not decide who actually captured the bulk of the value created by making design collaborative in the browser.

The $20B Adobe Exit That Died

In September 2022, Adobe offered roughly $20B in cash and stock for Figma, its largest acquisition ever. Strategically it makes sense. Adobe XD is losing. Figma is the default in UI design, and increasingly the connective tissue of product teams. The fastest way to protect Creative Cloud's moat is to buy the attacker.

Designers hate it. For them, Figma is precisely the anti-Adobe: lighter, faster, collaborative, less rent-extractive. The acquisition reads like a jailbreak where the warden moves into your new apartment.

Regulators hate it for a different reason. For UK and EU antitrust authorities, this is exactly the pattern they've been itching to break: incumbents buying the category threat before it really matures. The CMA and European Commission signal they're ready to drag this through years of antitrust litigation.

By December 2023, Adobe and Figma walk away. No clear regulatory path, too much friction. Adobe pays a $1B reverse break-up fee for the privilege of not owning Figma.

Here is where the narratives bifurcate.

On one side, pro-regulation commentators treat Figma as the poster child for "Lina Khan was right": instead of being absorbed into yet another Big Tech conglomerate, a thriving independent competitor survives, later goes public, and, for a while, is worth far more than Adobe's $20B bid. Employees and VCs end up richer because regulators said no.

On the other side, skeptics look at the more sober valuations months later and shrug: Adobe's $20B cash-and-stock was objectively generous in the macro environment of 2022–2023. By late 2025, as FIG trades back toward the high-teens to low-twenties billions, the company is more or less where it would have landed anyway, only with a lot more drama along the way.

Both readings miss a deeper, more uncomfortable truth.

Regulators did not magically "give" retail investors access to Figma's upside. What they did is force the existing private stack, which includes VCs, founders, early employees - to hold longer and ride a different exit arc.

Instead of monetising at $20B in a clean, cash-heavy sale, they were nudged into a story that would re-rate their holdings up to $56B in a one-day IPO mania and then back down toward $20B as gravity returned.

It wasn't a matter of democratization; rather, it was path-dependent leverage on the same exact cap table.

The Tender, the Reset, and the Employee Coin Toss

Once the Adobe deal dies, Figma has to do something emotionally and financially difficult: re-anchor the entire company to a lower number without breaking its culture.

Internally, it grants fresh equity to employees at a $10B valuation and offers favourable packages for those who want to leave by the end of January 2024.

Then, in May 2024, it runs a secondary tender offer at a $12.5B valuation, allowing employees and early investors to sell between $600M and $900M worth of stock to Fidelity, Franklin Templeton and a set of existing backers like a16z and Sequoia.

On paper this looks benevolent. The company is cash-flow positive; it doesn't need fresh primary capital. The tender is basically: "You've just had your near-term $20B acquisition ripped away by regulators. Here's a liquidity window at ~$12.5B if you want to de-risk your life a bit."

In practice, it creates the kind of dilemma that haunts startup employees for decades.

Do you sell at $12.5B, still above the last private round, based on fundamentals that justify something around $8–10B? Or do you hold for an unknown IPO, in an unknown macro, at an unknown multiple, while your career, mortgage and family planning quietly hang on the outcome?

Hindsight makes this look trivial. We now know that within ~15 months, Figma will price an IPO at ~$19.3B, briefly trade north of $50–60B, then slide back toward the high-teens.

But employees in 2024 do not have that luxury. They're looking at:

• A failed mega-acquisition.
• A valuation "reset."
• A single tender window at $12.5B.
• A founder with dual-class control who can steer the company into whatever exit path he deems optimal.

Equity planners and secondary funds now use Figma as a case study in presentations: the perfect example of why you should treat each liquidity window as one decision in a multi-stage game, not a referendum on your faith in the brand. Some employees who sold in the tender will never forgive themselves when they see the $60B headlines. Some who didn't sell will quietly wish they had as the stock grinds back toward the teens with a high-beta volatility profile.

For IPO Genie, this is precisely the kind of structural pathology worth studying.

Liquidity events are not neutral. They're power. They determine who can de-risk when, who is forced to gamble, and who has the information and optionality to do something more nuanced than "all-in or all-out."

In Figma's case, the rules of that game were set by private boards, late-stage funds and antitrust lawyers. Retail was never meaningfully in the room.

The IPO That Worked Exactly as Designed

Fast-forward to mid-2025.

Figma files its S-1: $749M in 2024 revenue, 48% growth, 91% gross margins, 46% YoY growth in Q1 2025, and the sort of net-dollar retention that makes SaaS analysts salivate.

It also quietly discloses something unusual: roughly $69.5M parked in the Bitwise Bitcoin ETF (BITB), about 4–4.5% of its cash and securities, with board approval to convert another $30M of USDC into BTC.

The IPO process itself follows a familiar dance:

• Initial talk of a $25–28 range, valuing the company at roughly $13–16.5B fully diluted.
• Demand comes in hot; the range is bumped to $30–32.
• The deal ultimately prices at $33, implying around $19.3B on a fully diluted basis and raising roughly $1.2B in total, about a third primary, two-thirds secondary from selling shareholders.

On day one, the small float and huge demand do what they always do in these setups: they light themselves on fire.

The stock opens around $85 and closes at $115.50. Renaissance Capital, which tracks IPOs for a living, calls it the biggest first-day pop for any US IPO raising over $500M in more than 30 years.

This is where the argument about "broken IPOs" resurrects itself.

On one side, critics like Bill Gurley and a small army of newsletter writers do the napkin math. If the company sold ~37M shares at $33 that immediately repriced to $85–$115, it "left" somewhere between $2B and $3B of proceeds on the table.

On the other side, defenders point out that:

• The other ~550M shares not sold in the IPO were repriced overnight at the market level. Taking a "discount" on 6–7% of your equity to reprice the remaining 93–94% higher is not irrational.
• A hot pop produces exactly the kind of marketing Figma used: a triumphant story about a beloved tool, a new era for design, and great photos of the founding team at the NYSE.
• Overpricing and then trading down is reputationally worse for everyone involved, as the 2021 cohort learned the hard way.

The mistake is to pretend this is about IQ or moral virtue.

The Figma IPO did not "fail." It executed the exact script the modern IPO machine is built to execute:

• Underwriters optimise for their institutional clients and their own reputations. They want a deal that trades up, not one that limps.
• Late-stage funds often prefer a huge day-one pop as it provides an instant mark-up on the vast majority of their position.
• Founders get a headline valuation, liquidity, a brand halo and, in Figma's case, keep ~74% of the voting power through dual-class shares and proxies.

The constituency that most consistently receives the least favorable terms in this process is the one the system pretends to serve: the broad investing public.

Retail investors, and institutions without preferential allocations, are offered a simple choice: chase the halo at $115, or wait until volatility, earnings and lockups knock the stock into a new equilibrium. Many choose the former. Most regret it.

Gravity, AI Margins and Bitcoin on the Balance Sheet

Within days of the IPO, Figma shed roughly $11B in market value as the stock fell more than 20% in a single session. Reuters calls it what it is: profit-taking by early investors and flippers after a historic debut.

By early August the shares briefly spike as high as ~$140, then settle into a long, choppy slide. When Figma reports its first earnings as a public company in September, revenue was up 41% year-on-year, but with slightly softer guidance and AI-driven margin pressure, the stock dropped again, almost 20% in a day.

Nothing in the business itself is catastrophic. The company is still growing at high double-digits. Net-dollar retention is healthy. The product is entrenched. The issue is simple: when you come out of the gate trading at 20–25x forward revenue, sometimes closer to 200x projected earnings, anything shy of perfection looks like disappointment.

By November 21st, less than four months after the euphoric debut, Figma's stock briefly traded below its $33 IPO price, touching $32.83. The entire day-one "gift" is gone for anyone who bought after the bell.

Overlay that with the treasury subplot.

Thanks to the IPO filings we know that, going into the IPO, Figma holds around $69.5M in the Bitwise Bitcoin ETF, about 4–5% of its cash and securities, and has approval to add another ~$30M via USDC. As Bitcoin rallies and Figma tops up, that stake grows to around $90M by Q3 2025.

Crypto media frames this, predictably, as a "Bitcoin sweetener" for a hot tech IPO; governance traditionalists frame it as an unnecessary marketing gimmick that adds volatility to an already volatile equity. Dylan Field has to explicitly insist that they're not trying to be Michael Saylor.

From an IPO Genie lens, the treasury decision is a sideshow.

The real show is the way capital, liquidity and narrative interact:

• A structurally excellent business with strong fundamentals.
• A multi-year private compounding arc.
• A single, theatrical listing event that recuts the movie in a way that is great for some insiders, catastrophic for some late buyers, and mostly irrelevant for the underlying product.

Whether the treasury holds 0% or 5% BTC doesn't fundamentally change that.

The Real Lesson: Value Accrues in the Dark, Retail Buys the Light Show

If you ignore the ticker for a moment and just draw this as a flow of value, Figma's story becomes much simpler, and more damning.

Most of the economic action happens in four zones:

1. 2013–2021 private compounding. Seed at tens of millions, growth rounds up to $10B. The delta between "two WebGL kids with a demo" and "default design OS for product teams" is captured almost entirely inside private funds, early employees and founder equity.
2. The blocked $20B exit. When regulators killed the Adobe deal, they weren't protecting retail investors. They were forcing existing holders to stay in the game and changing the instrument of exit from "cash-and-stock M&A" to "IPO plus future sell-downs."
3. The 2024 tender at $12.5B. This is a classic "insiders only" liquidity window. It allows early investors and selected employees to sell at still-rich numbers, long before retail ever sees a prospect.
4. The IPO + lockup complex. A small slice of shares are sold at $33, the rest are repriced by the public market in a violent arc from $33 → $115 → $140 → sub-$33. Anyone without preferential allocations is, by definition, catching the falling knife or buying the top.

At no point in this sequence is there a serious mechanism for a "normal" investor to participate in the upside on comparable terms to institutional LPs.

If you try to get exposure via public markets, you basically have three options:

• Buy into a peak narrative at 250–400% above the IPO price.
• Wait for things to "settle" and buy a still-expensive asset after months of drawdowns and negative headlines.
• Avoid the whole thing and tell yourself you'll catch the next Figma earlier, without any real infrastructure that lets you do that.

On the other side of the table, early backers are in a radically different game:

• They can sell a slice in the 2024 tender.
• They can sell a slice into the IPO.
• They can sell post-lockup when liquidity deepens.

This is what people mean, in practice, when they say "90% of the value creation happens in private markets." It's not just that companies stay private longer. It's that every meaningful decision about who shares in that value is taken long before any IPO filings are made. The same pattern played out with SpaceX early investors and Stripe's private market rollercoaster.

Figma is not an aberration. It is the system working exactly as built.

Timeline of Figma's Journey

What IPO Genie Is Trying to Change

IPO Genie exists because the team believes this pattern is not sustainable economically, ethically, or culturally.

If you strip away the branding, Figma's arc is exactly the kind of story our entire model is built to front-run for our community:

• A real business with real customers and expanding cash flows.
• A brutally concentrated cap table until very late in the game.
• A series of opaque tender offers and negotiated secondaries only insiders can touch.
• A final, theatrical IPO where public investors get to either overpay for a de-risked asset or stay on the sidelines and watch the compounding happen to someone else.

The question is not "was Figma worth $20B or $60B?"

The question is: why do only a few thousand people globally get to participate in those kinds of trajectories at cost, while everyone else is systematically confined to cleaning up the last 10–20% of the curve?

Our answer, and the entire reason IPO Genie exists, is to change where and how that participation happens.

Concretely, that means designing an architecture where:

• Access to vetted private deals is gated by stake and behaviour rather than passport and net worth: hold $IPO, clear compliance, and you can reach curated pre-IPO allocations that used to live in gated email threads between funds.
• Liquidity looks more like a series of transparent, programmable windows than a single cliff. Tokenized positions can have controlled secondary markets long before any public listing, with on-chain records of who sold when and why.
• Upside is not swallowed entirely by binary events like "Adobe gets regulatory approval" or "IPO book is 40x oversubscribed." Instead, revenue participation, staking yields, and index-style baskets allow you to harvest parts of the arc while the company is still private.
• Governance isn't a black box. IPO token holders participate in platform governance, influencing how access, curation, and incentives are structured.

None of this magically eliminates risk. Private investments remain high-risk, illiquid, and subject to regulatory constraints; no platform can remove those fundamentals. There will still be Figma-like arcs that overshoot and correct. Some deals will disappoint. Some will have a surprisingly large upside. That's the nature of venture capital.

What it does change is the distribution of who gets to carry that risk, when, and on what information. Retail participants gain more agency in deciding where and how to invest. No more "take it or leave it" late stage setups.

Today, a designer who loves Figma can at best buy a handful of FIG shares in a brokerage account at whatever price the machine spits out. In an IPO Genie world, that same person could have had fractional exposure to a basket of Figma-like deals years earlier with structured liquidity, on-chain transparency and the ability to compound well before mainstream news pushed out headlines about the company in question.

The Figma IPO is not a failure in any sense if you don't consider the fact that retail got to watch it from the sidelines. It is, from a certain angle, a triumph: regulators flexed, an independent competitor survived, thousands of employees and a small group of funds got paid.

It's also a reminder that if you wait for the headlines, memes and DJs outside the New York stock market, you are not investing in innovation. You are underwriting volatility, narrative and everyone else's exit.

The work in front of us, and the lens through which we design IPO Genie, is simple to state and hard to execute:

Move the retail participation from the last ten minutes of the movie to the entire script. Give more people a seat before the board slides say "up 250% on day one." And make sure the next Figma-level story does not have to choose between selling itself to an incumbent or running the same IPO theatre with a slightly different soundtrack.

Because as entertaining as Figma's listing day was, the real question for anyone serious about capital allocation is not "how high did it go." It is: who, structurally, got to be early and how do we build a world where that group isn't limited to the same hundred logos on every cap table.

Additional information is available via whitepaper.

That is the direction IPO Genie is designed to explore.

Any discussion of platform design reflects stated intentions and proposed architectures rather than guaranteed outcomes.

Join the IPO Genie presale now and be part of a world where retail gets to be early.

Frequently Asked Questions

Q: Why was Figma's IPO considered controversial?

Figma's IPO was controversial because the stock opened at roughly 250% above its offering price, then lost most of those gains within months, briefly trading below the IPO price. Critics argued the pricing left billions on the table for insiders while retail investors who bought after the open were left holding a rapidly declining asset.

Q: What is liquidity in the context of pre-IPO investing?

Liquidity refers to the ability to convert an investment into cash at a fair price. In pre-IPO investing, liquidity is extremely limited because shares are not publicly traded, so investors typically must wait for specific events like tender offers, secondary sales, or the IPO itself to exit their positions.

Q: How does IPO timing affect investor returns?

IPO timing has a dramatic impact on returns because most of a company's value creation happens during the private years. Investors who enter at the seed or early stages can see hundreds of times their initial investment, while those who buy on IPO day often pay peak valuations and may experience significant drawdowns as the stock finds its real market equilibrium. For more on this dynamic, see Pre-IPO vs IPO Investing: Where the Real Money Is Made.