one of the vc's has just sold its stake in LL... why?

http://www.pehub.com/42270/stratim-buys-stake-in-linden-lab/

who sold out I wonder? and why? I thought LL was exceedingly profitable..well that's what M keeps saying.

One of the investors probably jumped ship before the likely upcoming dive is LL's share price (like land prices have) with people tiering down & leaving because of the adult eviction fiasco.

Gomez

Looks more like someone was offered a deal they couldn't turn down, the buyer doesn't anticipate LL running out of money:

people change stocks all the time..sell and move on and invest into something else..
there could be lots of reasons

Some very old Lindens left. They would have shares too. Maybe one cashed out.

Without knowing the details of the transaction, there is nothing positive or negative to be read into the fact that one entity bought another entity's stake.

If you believe the quote of the Stratim representative quoted in the article, he believes Linden Lab is profitable. He indicates that Linden Lab is profitable enough that it doesn't need to raise more venture capital. He also said "almost" all of another stakeholder's stake- meaning whoever sold didn't completely sell-off. That sounds more like a situation not of someone bailing out, but of someone in a cashflow crunch.

That is if you believe the quote, which should be taken with a grain of salt, of course he's going to say publicly that he is buying into a great company. He's not going to say, "We decided to grab the hot potato."

VC's traditionally sell out of a company (usually through a shares issue iirc) once they consider a company has moved out of startup mode. Usually their investments are quite short term.

I expected the VC's to have moved a couple of years ago at the height of the hype but they didn't. Which can most possibly be explained by the fact that most are not strictly speaking VC companies but moneyed friends and business acquaintances.

Cash flow problems does sound plausable..

When a VC pulls out, it often means the company is not profitable. That is not to say it will be a loser, but a flat return on investment, is not really an investment insomuch as it is a bucket to bail a leaky vessel.

There is something to be said about jumping ship before the next voyage while you are still in port. Any VC worth their salt, won't normally pull out of profitable projects unless there are storms in the forecast.

Yup, and TFA also said it wasn't an institutional investor. The only LL investors that aren't individual people are VC firms, so that blog really implies a personal sale.

I'm sure I'll be corrected on this, but LL isn't a public company and, therefore, doesn't have shares, so the share value can't dive. Is that right?

They're sLhares.. Virtual shares with no real-world value (unless you cash them.)

That's how I read it too. LL has had very little dilution, so those early grants would now be worth quite a bit. Of course, it would have to be a very early investor or employee to have actual equity, as opposed to options.

Someone may have wanted money to get started on another new venture. Cory Ondrejka's been at EMI for a year, hasn't he? Must be getting bored by now.
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Yeah, privately held US corporations still have shares. The value can change too, it's still equity.

Well, it doesn't have a "share price" per se, because it isn't publicly traded, but that's kind of a point of semantics. The "value" of a slice of the company can go up and down, determining how much a sale like this one generates.

We don't know how much of a return the seller got on their investment in this case, nor what motivated it. For all we know, Mitch (say) may have made a handsome profit here, to report against capital losses generated by some other, less fortunate venture.

Someone, maybe. Mitch ... betcha $5,000 it's not Mitch. (why should this person be the only one to make a little money here? )
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Is Ginko handling them

Yeah, you're right about that. I like your Cory example better, myself.