Gaurav Kapadia: evaluation

Transcript context

…It’s gone well, right? What can you relate about your thoughts at the time? I would say there’re lots of different ways to be a good investor. There’s what people like Citadel do, which is very short cycle, very short-oriented, which I think is excellent, which is having very high fidelity on short-term data points. There’s what great private equity firms do, which is having really good long-term signal and financial leverage on LBOs. What we do is a little bit different, I would say. I think Figma will play a part in it, but honestly, there’re so many investments, whether it’s General Electric, which has been one of our larger investments over the years, which is basically, can you articulate an extremely good risk reward where the downside is relatively bounded and the upside is potentially unbounded, but you can forecast what that looks like? I think Figma was particularly interesting at the time we made the investment because the antitrust authorities had just blocked their acquisition by Adobe. So, for roughly half the price Adobe was going to pay, with a significant break free on the balance sheet, you got a best-in-class asset with an extraordinary founder mode leader that was compounding earnings at a very high rate and that had one foot in the future. The asymmetry was very attractive. You had a significant net cash balance sheet, you had a very high confidence of what the growth rate was going to be, and you also had confidence in the leadership that they’d be able to navigate a complicated environment. Now, you don’t have to name the company, but if you think of a case where you didn’t invest, but almost was going to, could you talk us through what leads you at that final moment to pull the plug and say, “No, we’re not going to do that.”…

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