No, you've not missed an announcement of an upcoming IPO. We're just looking at what it would mean if you did. There's been talk for years about Linden Lab taking the company through IPO (Initial Public Offering) and going public.
Given the vision and history of the company, and the overall direction of the business, an IPO would more or less signal an epic failure to deliver.
Investors, who constitute the primary owners of a business, generally want two specific things out of their investment. One is, they want their money back. The second is, well, several times their money back. Generally within a few years.
The traditional method of getting both of these things is to sell part or all of their holdings in the company to the next investor. The next investor wants, well - generally the same two things.
The current crop of investors in Linden Lab are unusual. In the early days of Linden Lab, hardly anyone would touch the project. The investors Linden Lab has presently are the long-tail type. Patient and willing to take the long view.
An IPO where large numbers of shares are sold on the market to any investor with the cash - well, that would be an exit strategy. An acknowledgement that the investment just isn't going to pan out in the required time-frame.
Certainly some companies need IPO money to fund massive growth, but Linden Lab isn't the kind of company that would apparently benefit from that kind of growth. Quite the opposite, in fact.
Public shareholders introduce new layers of fiduciary responsibility. If you've wondered in the past why privately held companies seem to care more about their customers than public ones - it's because there are legal strictures in place about maximizing shareholder value. A public company must care more for the shareholder than the customer. Public companies that put the customer before the shareholder can easily wind up the target of shareholder lawsuits. The shareholder's interests always come first -- frequently (but not always) that involves satisfying some of the customer's interests as well.
Should the existing round of investors choose to follow the IPO route, we can see them exiting the company as soon as the law permits (pre-IPO shareholders usually are unable to sell or trade their shares for some time after the IPO. The amount of time varies by jurisdiction but is commonly 12 or 18 months). This would lead to a change in the board, essentially bringing on a new group of decision makers to guide the company.
Would Rosedale stay on at Linden Lab at that point? If the IPO was sufficiently successful, he'd make a tidy packet out of it. Perhaps enough to run out and open his own self-funded virtual world business -- one that is not beholden to other investors or shareholders. One where he can create his vision as he always intended to do. It's not hard to imagine Rosedale dumping his things into a box and moving into an empty office with a few developers to do just that. He's done it before, only with less starting capital.
That right there has got to be an attractive notion. The new, public Linden Lab might continue for a time, or even do well, but it would be virtually certain that the direction would change drastically. That whacky fiduciary responsibility stuff.
If Linden Lab were a company like the pre-IPO Google or Akamai, an IPO would make a ton of sense. However, they aren't. Building capital to take Linden Lab to the next level? The next level of what? Of being a simulator and currency hosting company living off the back of an increasingly open-source set of software?
No. An IPO would signal an exit, not growth. The company direction doesn't give them a new level to grow to. The only place to go with that money would be acquisitions -- which would be a convincing sign of lost direction.