How an early investment in Figure turned into a massive win for a VC who heard the pitch while eating burgers in San Francisco

In a bold move that has now paid off significantly, DCM made an early investment in Figure Technologies, venturing into the untested waters of blockchain technology. Nearly eight years later, this decision has transformed into one of DCM's most lucrative successes, with a stake now valued at nearly 60 times its initial worth following Figure's recent NASDAQ debut. Leading the charge, DCM invested $10 million in Figure's seed round back in 2017, securing a substantial 11.3% ownership stake in the company. The shares opened at $36 each during their public listing, a remarkable 30% above the expected IPO price. As of Thursday, this gives DCM's investment an impressive valuation of approximately $600 million. The recent revival of the IPO market has been notable, highlighted by successful launches such as Figma and Klarna, which went public after two decades of private status, achieving a valuation of $15.1 billion. Additionally, StubHub recently began its IPO roadshow, signaling a strong market trend. David Chao, co-founder and general partner of DCM, recalls the initial pitch from Figure's founder, Michael Cagney, which took place over burgers at the iconic Balboa Cafe in San Francisco. Chao was captivated by Cagney's vision for revolutionizing the loan origination process, which he had experienced firsthand while at SoFi, the personal finance company he co-founded and later left due to controversies surrounding workplace culture. Cagney's proposal involved utilizing blockchain to streamline the loan verification process, eliminating unnecessary middlemen and their fees. Chao was immediately impressed, recognizing Cagney as a unique talent in the industry. However, he faced challenges persuading his partners, who were skeptical of blockchain's viability at the time. Despite initial reservations, Chao dedicated time to understand Cagney's evolution since leaving SoFi. He noted that Cagney had taken lessons from past mistakes and fostered a healthier corporate culture at Figure. This shift was evident, as Figure reported a net profit of $29 million this year, contrasting with a loss of $13 million from the previous year, highlighting a trend where most fintech companies struggle to show profitability upon going public. Chao attributes this successful investment to the strong relationship he built with Cagney, which dates back to 2012 when he supported SoFi's initial funding round. This connection underscored the importance of trust and loyalty in the venture capital landscape, with Cagney showing a preference for collaborating with those who have been part of his journey.