A few months ago, I shared my thoughts about venture capital funds distributing returns to limited partners (LPs) via cash or in-kind distributions (i.e., stock in publicly traded companies). I wondered how many venture capital firms use in-kind distributions so their LPs will have the option to own shares in great companies for decades.

It’s hard to know how a venture capital firm makes distributions unless you work for it or are an LP in one of its funds. But I recently came across a public filing indicating that a venture capital firm distributes shares in a public company to its LPs. These shares are worth hundreds of millions of dollars. I found this interesting because this firm made an early-stage investment when the company was very young, around fifteen years ago. The company has been public for several years. The firm could have easily sold the shares and returned cash to LPs, but it opted to do the work of returning shares in the company to LPs. The filing also indicates that the venture capital firm general partners took their carry from the deal (i.e., profit sharing) in shares and haven’t sold those shares.

I don’t have insider information on this public company or the firm, but I assume that the venture capital firm’s partners are bullish on the long-term prospects of this company and want their LPs to have the opportunity to participate in its future upside.