In light of the amazingly successful IPO of the tech company Figma one week ago, I decided to do a bit of research.

But wasn’t as interested in looking at the Figma in 2025. I was interested in the Figma in 2013 when Co-Founder and CEO, Dylan Field, was raising his seed round.

I’m going to analyze five VC firms that Dylan Field pitched to when he was raising his seed round.

Four Passed. One Invested.

Of course, there were many, many more than five but I’m focused on 5 marquee level VC firms.

It is also always fascinating to me to read about investors who had the opportunity to invest, but didn't take it. And to understand why?

For the VC firm that did invest at the seed, Dylan Rimer of Index Ventures, what did this person see? And to understand why?

Because at a fundamental level - all of these VC firms saw the same set of data as the rest - but made a different decision.

But I notice something that I just inadvertently typed there - the question, what did they see, or not see? This in my opinion is gets at one the fundamental errors of investing in early stage startups.

✅ Early stage startup investing not about seeing, but about believing. ✅

It's not, what did the VC see or what didn't they see?

But rather, what did, or didn't they believe?

In the early stages, there is very little meaningful traction. I’m going to be straight up honest, sometimes, it doesn’t look like much. That’s not a comment on founders, that’s just a comment on the early stage nature of the snapshot in time when I interact with them.

✅ In early stage investing, there is WAY MORE believing than there is seeing. ✅

Let’s dive in.

Accel

Accel declined to invest in Figma’s seed round because they had already backed InVision, a product that they cited as competitive

This gets at a very common reason for passing on startups - "We have a conflict in our portfolio.”

All startup founders receiving this newsletter likely have heard this from an investor.

I heard it many times when I was a founder.

Truth be told, this is a fair reason to pass. Little that can be done here.

I have also communicated this reason a number of times as an investor. There have been a handful of companies that after talking with the founding team, it is evident that investing in this company in consideration would throw a red flag to the current portfolio company. The companies were tackling the same problem in different ways but with the same business model.

The last thing than an investor wants to get is backlash from a company that they invested in that the companies were too competitive and the investor is picking a favorite product for a given use case, etc..

Placing a bet in a certain company creates conviction that cannot be walked back. 

That’s why Accel passed on Figma.

Greylock Partners

When pitching and communicating with Greylock Partners, Dylan Field worked with the Greylock Partner John Lilly. Prior to Greylock, Lilly was CEO of Mozilla, the organization behind Firefox, which was an open source Web browser used by more than 450 million people. Thus, one can assume that John Lilly understood the browser - so when Dylan of Figma approached him with a browser-based design tool, one might say from the outside looking in that John Lilly was a slam dunk investor for Figma.

But John's core worry was the economic viability, not the tech. The early demos of Figma didn’t convey a clear path to monetization or user traction.

It didn't help that the Figma CEO, Dylan Field, had a slow path to monetization. They prioritized building an exceptional product and user base over early revenue. Their initial focus was on network effects and user engagement, which meant a long ramp of free-tier growth. 

So Figma’s slow path to monetization was a bit of a fake out for John Lilly, who was questioning how this would be economically viable.

That’s why Greylock passed on Figma’s seed round.

Kleiner Perkins

Kleiner Perkins is an fascinating anecdote that speaks to the importance of timing and the right Partner.

Figma CEO Dylan Field was actually an intern in Kleiner Perkins' Fellows Program, which a highly competitive program that places selected students with companies in the Kleiner Perkins portfolio. Field worked at a company called Flipboard.

So, Dylan Field actually had deep ties with the VC firm.

But when the seed round happened in 2013, Kleiner Perkins passed. It is a bit unclear as to the reasons why. Some sources indicate that Kleiner Perkins was more focused on the Series A stage and not the Seed stage. But there is also indications that they may have been some shifting in the personnel at the time at the VC firm so the it may not have been the best timing.

Yet, what is interesting is that Kleiner Perkins passed on Figma’s seed round, yet led Figma’s $25 million Series B round in 2018. 

So what changed with Kleiner Perkins? That is what is fascinating. 

The Partner that led Figma’s Series B from Kleiner Perkins was a Partner named Mamoon Hamid.

Hamid was not at Kleiner Perkins in 2013 when Figma first came around. Hamid was at the VC firm, Social Capital.

By way of background, at U.S. Venture Partners, Hamid made early investments in Yammer and Box. Then with Chamath Palihapitiya, he co-founded Social Capital, where had made early investments in companies like Intercom and was the first outside investor in Slack. (Article here)

So, when Hamid joined Kleiner Perkins in 2018, Hamid already brought with his honed expertise of recognizing and investing in early stage winners in enterprise software.  

So, when Figma was looking to raise its Series B round, Mamoon Hamid stepped up to lead the $25 million Series B round.

In fact, Figma was Hamid’s first investment at Kleiner Perkins. 

Figma CEO Dylan Field writes in this Medium article where Dylan announces their Series B round that, “We’re looking forward to working with Mamoon.... He’s known for making prescient early bets on SaaS companies like Slack, Box and Intercom, in part due to his data-driven investment thesis and go-to-market expertise.”

A layer of expertise that my conclusion is, was not present at Kleiner Perkins when Dylan Field of Figma was making the rounds with his seed round in 2013.

This gets at something very subtle but highly relevant when founders are fundraising, that I want to make explicit. 

✅ The VC Partners are the relevant unit of the investment decision. Not the VC firm. ✅ 

The investor is not directly Kleiner Perkins. Well, it is - frankly, its the capital and brand of Kleiner Perkins.

✅ The actual unit of relevance in an investment is the VC Partner - the human relationship that the founder and startup has with the investor. ✅

Thus, when I assess the reason that Kleiner Perkins passed in Figma’s seed round is 2013, it appears to be a matter of “Wrong Parter, Wrong Time.”

But in 2018, it was “Right Partner, Right Time.”

Sequoia Capital:

Sequoia Capital also passed on Figma’s 2013 seed round. Honestly, I couldn’t find much to understand why the firm passed in 2013. 

But in 2018, Sequoia’s team and portfolio founders expressed skepticism about Figma’s browser-based UX, seeing it as too radical a shift, noting that “Asking designers to work in the browser was like asking finance pros to abandon Excel.”

Essentially the answer was, "I don't see this behavioral shift happening."

But just one year later, something must have happened - just one year later, Sequoia led Figma’s Series C round. Clearly, something changed in the traction story of Figma so that had enough proof points to help the Sequoia team believe that the behavioral shift could happen. 

Index Ventures:

Dylan Rimer of Index Ventures invested in Figma's seed round in 2013.

But Rimer had an early look. He met Figma CEO Dylan Field one year earlier in 2012 when Field was an intern at the startup Flipboard (remember from the Kleiner Perkins Fellows Program?). In an interview with Dylan Rimer, Rimer recalls that Dylan Field gave a presentation to Flipboard’s board, outlining his research about the features users loved and which ones flopped.” 

Rimer recalls, “What was interesting was not only did he do a very good quantitative job of figuring out what features made the most sense, but the way he presented it was incredibly visually appealing and original.” 

“I remember him as an 18-year-old and thinking: ‘Wow, this person has a unique, compelling way of conveying information.’”

And according to Rimer’s LinkedIn post, he said, “I left that meeting thinking, this is someone worth keeping an eye on.”

Rimer continues. 

A year later, Dylan came by our San Francisco office with Evan Wallace to pitch us on their new company. Their idea was ambitious—collaborative creative tools, built entirely in the browser. The product was still in its early stages, but there was no shortage of conviction. It was obvious that Evan had the technical chops, and that Dylan had the vision and drive to figure out the rest. 

As far as why Rimer decided to invest in 2013, he said, 

“It was a time when we thought everyone in the world wanted to be a designer… Everyone was talking about being a designer of apps, of software, of fashion. It was a term that became synonymous with the future. So, we thought design meant a lot more than just designing software or graphic design, that it would be an all-encompassing term. And that probably meant most people would want to try out their chops at designing.” 

Rimer believed something about the future. And how Figma could shape that future.

This account of Rimer’s decision to invest, compared to the other VC firms passing on the seed round, it can make it seem like Dylan Rimer of Index Ventures seem like a VC Partner with the Midas touch. He does have a lot of wins to his name - Discord, Etsy, Dropbox, etc.

But there is a twist in this story.

Dylan Rimer actually passed on AirBnB.

In an interview with the Financial Times a year ago, the reporter asks him a series of questions that I find fascinating.

The reporter asks, “What have been your biggest mistakes in your career? What have you learned now?”

"One of the biggest mistakes was to try and predict the total available market size. We really view TAM as noise.

The example that comes to mind for me was Airbnb: we saw Airbnb early and we were like, OK, what’s the size of the market? How many hotel rooms are going to be cannibalised through Airbnb? Rather than thinking: actually, Airbnb is just going to add to the travel and leisure sector in an unprecedented manner, and it’s going to open up an entirely new market space. That was a regret.”

Wow.

But notice what Dylan Rimer inadvertently said there - in his quote, he implied a transition - the transition is moving from what they saw, vs. what they should have believed. 

He moves from what is clearly how he factually analyzed what he was seeing in the current state - what's the size of the market, how many hotel rooms are going to be cannibalized through AirBnB?

Rather than believing something different about the future that this could actually be additive to the travel and leisure sector. 

What he says in the second part about AirBnB could not be seen in the current state, looking at the current data on hand, it had to be believed.

And that’s exactly the point - 

✅ Much of early stage venture capital investing will always be unquantifiable, and will require much more believing. ✅

As an aside, I also find it interesting that the three out of the 4 firms that passed on the seed ended up investing later. 

Greylock, Kleiner Perkins, and Sequoia ended up investing in Figma’s later rounds. Accel never invested.

It’s a good reminder to even though you don’t get what you are looking for initially, time changes opportunities, and it may make a lot of sense later on. So, for both founders and investors, your reputation matters more than anything. Always protect it and treat everyone with respect. 

Closing Thoughts

Founders, and the investors in that company, have a common thread that is very profound.

The shared belief about the future of a given industry. 

But the investors that pass on that company, ultimately are not believing in that future - either they believe the future is wrong, or they aren’t going out to the future at all. That’s a pitfall for investors that I am keenly aware of myself. 

The founder is the first believer. Then they need to find an investor and series of investors over time who have the open minded-ness to cast off what they see, and rather put on the lens of vision and belief. 

Founder/investor alignment happens because the founder evangelizes their vision of the future and the investor intercepts that vision and it becomes their vision too. 

The investors who have the eyes to believe, are the ones that come in early, even when a startup doesn’t have all the pieces in place. 

And sometimes, it goes well, both the founder and investor are handsomely rewarded for believing. 

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