New World Newsfeed: Linden Gets New Investor, But Why?

Private Equity Hub: Stratim Buys Stake in Linden Lab

According to a post on the board of Private Equity Hub, Stratim Capital, a firm which specializes in acquiring equity positions from privately held companies, bought a stake in Linden Lab, though not one of the Lindens' institutional investors. “We bought almost the entire position of an existing shareholder," Stratim's Zach Abrams told peHUB. "I don’t think this is a company that anyone will be able to put new money into, because it doesn’t look like it will need to raise another VC round.” I checked with the Lindens about this purchase, but a spokesperson sent back this terse reply: "Linden Lab generally does not comment on sales of its shares, including the identities of the parties involved."

So what's this mean for the future of Linden Lab and Second Life? Probably nothing in particular. Given the report's wording, it likely just means that former Linden staffers are exercising their options as individuals or a group -- i.e., they're cashing out. And if they're doing that now, I'd further speculate that it suggests a Linden IPO is not happening any time soon. (Because then, these early shareholders would wait to get a better deal on the open market.) At the very least (and notwithstanding Silicon Valley's waning interest these last couple years), it does show that Second Life is considered a valuable commercial property to serious investment firms like Stratim.

Comments

[Dirk Krause]

While they are at it, maybe they consider this:
http://web3dblog.wordpress.com/2009/06/12/dear-m-linden/

[Dusan Writer]

Hmmm - I'm not sure about the speculation on "cashing out". The statement was pretty clear that it was the stake of an existing shareholder. So, I'm assuming one of the early investors, maybe an angel, maybe someone like Kapor, sold their stake.

Options don't usually work like you describe them. So the staff angle doesn't really make sense.

But yes - if one of the early investors is selling to another, then the early investor probably does NOT have a hint of a coming IPO or they would have held on.

What's also interesting is that usually there are provisions in the shareholders agreements that when a shareholder decides to sell, the other shareholders have right of first refusal before the stake is sold to outside parties. May not be the case here, but it's one way to take the speculation I suppose.

[Nexus Burbclave]

It could be as simple as a stakeholder with a mortgage to pay off needing cash. The real estate market isn't exactly booming out there (or anywhere really).

I am a bit surprised that LL won't need another round of VC funding to help grow their enterprise platform.