Some stories are not very cheerful, and Prem Qu Nair shares quite a harsh one.

He goes from building Windsurf as one of the earliest engineers, his equity worth $24M, a whirlwind of a 72 hours sponsored by Google erases everything, his shares? worth only $240K or 1% of what he was owed.

Don’t get me wrong, 240K is a lot of money, and life changing for a large number of people, but this is the prime example of how nasty these situations can get. For context:

OpenAI tried to acquire Windsurf for ~$3B. That deal fell through at the final stages.
Google rushed in with a $2.4B acquihire. Prem had to forfeit all his vested shares. he decided against it, but was still left with a measly 1% of the true value of his shares. Founders bailed and took most of the big payout leaving ~250 employees with barely anything.
Cognition, acquired Windsurf’s IP + hired the employees not taken by Google.

Prem goes to Cognition. End of Whirlwind.

Now, what did the VCs that backed Windsurf make?

Windsurf raised a total of about $243 million as of its last raise in 2024 that valued the company at $1.25 billion, which means the total return to investors was about 4x their original funding. 

Greenoaks owned 20% of the company, returned $500 million on their $65 million investment → 7.7x Return
Kleiner Perkins, which led Windsurf’s Series B, returned about 3x Return

More on Prem Qu Nair’s X Account → Here

This week's funding rounds are serving up a huge round, acquisitions, and a little bit of fomo. From fast delivery to Mira making every seed round look like peanuts, let's dive into the freshest capital infusions fueling tomorrow's game-changers!

Figma underwriters completely got it wrong, and investment bankers are really taking the piss.

Last week we shared how Figma ($FIG) boosted its NYSE IPO range to $30–$32, targeting ~$1.2B raised at a $17.6B–$18.8B valuation, and went public on July 31st. And what a bang they did. The stock popped +250%, 3.5x its IPO price to $122.

Underwriters Morgan Stanley, Goldman Sachs, Allen & Company, and JP Morgan did a great job at lining their clients’ pockets. Figma could have raised $4.2 billion instead of $1.2 billion leaving $3 billion on the table. That’s messed up. They could have listed themselves and completely skipped the broad daylight robbery.

As of Tuesday’s closing, the hype has calmed down with the stock correcting -35% to $79.08, still presenting an IPO upside of +139%

Returns VCs Made

Figma was a Dragon investment for many of these funds, Index Ventures did 1,894 times their initial investment, my goodness.

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That’s it for today, hope you enjoyed this as much as I did curating it, see you next week!
-Kev