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There are two very different possible reasons: 1. They believe the price will drop and want to sell before that happens. If this is the case, it raises the que
by CodesInChaos 6y ago
There are two very different possible reasons:
1. They believe the price will drop and want to sell before that happens. If this is the case, it raises the question why they think the company is overpriced since, as somebody involved with the company for a long time, they might have insights the public missed.
2. They want to cash out for reasons unrelated to the company. For example because their investment model is to invest in a private company, wait until it goes public, and then sell.
- vidarh 6y ago3. They're a time-limited fund that needs to dispose of assets to their LPs (limited partners) before the fund closes down. They can do so by selling the shares, or they can do so by transferring the shares to their LPs. In this case as you can see in the footnotes, as a substantial proportion of these shares where transferred to their LPs, not sold.
- CodesInChaos 6y agoI consider that part of option 2.
- KoftaBob 6y agoIt's the example you gave in #2, that's how VC firms generally work.