The earliest investor in LivingSocial has already cashed in, but hasn't yet cashed out.

The secondary trade has arrived at daily deals site LivingSocial. Grotech Ventures, a Virginia-based VC firm that led the company's $5 million Series A round in July 2008, recently raised around $200 million by selling shares to undisclosed third-party buyers.

peHUB first reported the news, which Fortune has since confirmed. Two minor differences in our reporting, however:

1. 1. peHUB did not know the number of shares Grotech sold, but presumed that it sold "much of its stake." Guess that all depends on the definition of "much." Fortune has learned that the position represented just a minority of Grotech's LivingSocial holdings.
2. 2. Grotech raised its $108 million seventh fund in 2007, not in 2009, which means its entire LivingSocial investment came out of a single vehicle. Moreover, it means the entire fund has basically been returned 2x by (part of) a single deal. Every subsequent dollar from LivingSocial or any other portfolio company is gravy.

The final verdict on Grotech's decision will have to wait until LivingSocial either gets sold or goes public. But my snap judgment is that this is a smart decision. As were similar decisions made by firms like Accel Partners (Facebook), New Enterprise Associates (Groupon) and Union Square Ventures (Twitter).

Even if you don't believe we are living through another Internet bubble, you have heard the arguments from reputable folks. And if you lived through 2001, that has got to give you pause about keeping all of your investment eggs in the "tomorrow" basket.

By selling some of its LivingSocial shares now, Grotech guarantees a positive fund return while still retaining much of the original deal's upside. Imagine what we'd be saying about the firm if LivingSocial became this generation's Webvan, and Grotech had held onto all of its shares...

Grotech, not surprisingly, declined to comment.