Recently, there has been a lot of discussion about the IPOs on the VSTEX stock exchange in Second Life. Stock sales have been going slowly and everyone is offering their opinions why. These opinions range from concerns about the secondary public offering of SLC stock to what the marketing plans and road shows of the various companies are like. On these later points, VSTEX has written some helpful information for new CEOS. Yet I think there is another aspect that needs exploring, the macroeconomic forces in Second Life.

Over the past two years, the money supply in Second Life has been growing at a monthly rate of around 9%. At some points, that growth as been as high as 15%. At other points it has dropped to as low as 3%. In the past few months, it has been around 6%. (This is based on data retrieved from Second Life’s Economic Statistics.)

How does this compare with the growth in the Second Life Markets, and with VSTEX in particular? Detailed data from the exchanges is a little hard to come by. It can be sliced and diced a bunch of different ways and may be a bit misleading based on the newness of the exchanges. Nonetheless, there are some interesting ways to slice the data that I’ve received.

During the month of November, VSTEX deposits grew by around 1.5 Million Lindens, or around 35%. In October, they grew by 1.8 Million Lindens, which was about a 68% increase over the preceding month. That is around 3.3 million during the two-month period. During the same period, the Second Life money supply grew by approximately 223 Million Lindens, meaning that VSTEX accounted for approximately 1.5% of the money supply growth in Second Life during October and November. I am impressed with that number and it emphasizes my belief that financial markets in Second Life are more important than many people realize.

Is this because VSTEX was in startup growth mode? How much of this is because of IPOs during the two months? Will this number increase over the coming months? Working with the assumption that growth will continue at between 1.5 and 1.8 Million Lindens a month, it is useful to go back and look at the status of the outstanding IPOs on VSTEX.

Currently, there are six companies with IPOs and a seventh that has a secondary offering. How does the amount of IPO shares outstanding compare with these numbers?

As of earlier today, for all of the IPO shares to be sold, 5.8 Million Lindens will need to be invested. For each company to meet the minimum 50% that VSTEX requires for a successful IPO, 2.6 Million Lindens needs to be invested over the next two weeks. The current rate of investing only can account for about 30% of this.

This brings us back to key issues about IPOs. New CEOs need to think carefully about how much money they need from their IPOs, how much it is reasonable to get, and how they are going to go out and get it. So far, I’ve only heard from one company about their IPO, and I’ve invested with them.