Mamoon Hamid
speaker
146 appearances
1 recordings
1 series
first heard Oct 2024
last heard Oct 2024
Mamoon Hamid’s voice in public audio — every appearance, attributed to the second.
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Great question. Well, I wish there was a bit more selling happening right now or opportunities to sell. As you know, the M&A markets have been pretty, pretty slow. But to answer your question, Harry, there's a local maxima that I think about sometimes with companies where this is sort of the local maximum in terms of perceived value by the market for a company. And that's a great time to sell.
And so now you have to figure out when is the local maximum for a company. And I would say it's like the markets are riding high, but it's also like where people believe that this company is the leader. But there's questions around whether there's a standalone company we built and it's way better off being acquired by a strategic who can do even better things with the company.
That is, again, doesn't happen as much anymore. Have you done well selling? There's one particular example that I think ended up working out pretty well. This is when Yammer got acquired by Microsoft. It was a $1.2 billion acquisition. At the time, it felt like, man, we've got so much ahead of us. Yammer can become the next Slack.
And fortunately for us, Yammer got acquired and a year later we had a chance to invest in Slack. And so it almost like you had a great outcome and then you weren't conflicted out of investing in the future Slack.
Yeah. Yeah. In that case, when you get just cash, you just distribute the cash and you move on. And, you know, generally speaking, I would say even when companies go public for us, we've been pretty good about distributing stock. It's tough when you think Shopify went public at 700 million though.
Yeah. And I would say just, Harry, again, we have a lot of friends in the industry. In almost all scenarios, when you're returning 10x the fund on a great outcome, or 5x plus, let's say, of a fund through a legendary company, your LPs are happy. You're happy. You wish you would have held on and generate another few multiples on that fund. But you have an option of holding it.
The LPs do, as do you as a GP. You can hold on to your Google stock forever as John Doerr has done over the last 25 years. And that's a great choice you have. What has been your best performing investment on a pure multiples basis? It's probably Slack, I would say, even at the 250 post with all the dilution over time and take the 27 billion or some other number. That's a great multiple.
Figma, the initial investment was done at about 100 post. Rippling was also in the 250 post when we did it. There's one investment I remember doing early days of USVP where we did it at, I think, 10 post. It was a $3 million check for like 30% of the company. That company, about a year and a half ago, the founder, CEO, Steve Flagg, they sold it to Siemens for $700 million.
And that ended up being 70X. Crazy multiple, right? Some ridiculous multiple. But you know, when you hold on to something for 15 years, guess what the IRR on that investment was? If you still owned, let's say, 25% of that company at 700 million, so like 100 and something, 170 million, 3 million becomes 170 million or something like that, or that's a great multiple.
But the IR over 15 years looked more like, I think it was like 15%. We're in the multiple business still at the end of the day. But IRRs do take a hit when you hold on to something for 15 years.
They're in slow, man. Yeah, slow. A lot of the big companies are just gun-shy. I hear this all the time. Just like not ready. Too much going on in the regulatory space. Why would you bother if you're them? Exactly. You're like, why create headaches?
We already have multiple legal things that we're pursuing, and we don't need yet another thing we're questioned about or used as an example in this other thing. So yeah, why bother? The question is, are there a next tier of companies that will buy? And we thought, obviously, with Adobe Figma, Adobe is that next tier. And even that, the story has been told.
Yeah, you're right. Yeah, there are big private companies looking to buy small private companies. That's happening. And I think small, that was never part of the playbook. What would change the M&A market today? You know, it's easy to say like, you know, regulatory environment, like the people running these organizations.
I don't think so. I don't think a lot of the blame on Lina Khan, poor Lina Khan. In our own experience, that was not the issue for Adobe Figma. It wasn't Lina or the FTC. There were other issues here in the UK. There was a CMA that was really involved there.
Yeah. Yeah, I think everyone's just waiting until after the election. You know, I think we all thought there's a window of like eight weeks before the election or this year to go out and just not a lot of activity. I do think that we're going to have a good year next year.
I'm really hopeful. I think next year will be a good year for IPOs.
What did you see that no one else saw in this round and why did you? Credit goes first and foremost to Dylan and Evan who'd built an incredible product. It was just, it took a while to build. We've heard sort of famously the story around like WebGL advancing and finally by 2017 Figma had a product that could work multiplayer inside the browser as a design tool.
And that just wasn't the case in 15, 16. It just wasn't didn't have the latency for people like designers are very high end in terms of like their needs for product naturally. Right. And so lucky for us that we got to see the company when the product started to work and in the metrics for the product, even though the numbers of
number of users was small, the amount of use, you look at something like a Dao Mao or look at an L28, you just saw that designers were using the product 15, 16, 17, 18 days out of a month. So effectively every workday, a designer was going in and collaborating inside of Figma or using it to design inside of Figma.
And so you saw early indications that the product that had just launched and it was just in a few hundred K revenue, it was working. Yeah, lucky for us that we got to catch it before it. Can I ask, what did you get wrong in your assumptions on Figma? I have to share my memo with you. I would love that. Yeah, I know. I'll share it with you.
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