Cascade Investment LLC, the fund managed by Microsoft chairman Bill Gates, has made good on its November promise to exit from its investment in Pacific Ethanol. What's surprising? He's doing it at a loss, converting his preferred shares to common shares worth $8 apiece and selling them for less than $4 apiece. With 1.4 million shares sold in three days, that's a loss of over $5 million. Pocket change for Gates, certainly, but in almost halving his original 20 percent stake it's a strong vote of no confidence in the ethanol business. While Accel Partners Joe Schoendorf has said that "a good way to lose money is to bet against Vinod [Khosla]" who's been bullish on ethanol, I'm going to side with Gates on this one.

What happens when you stick a handful of VCs into a room and ask them to pontificate? Apparently not much. By the time that notables like John Doerr and Steve Jurvetson got to this late excerpted part of their panel at the Churchill club, they were playing the Valley version of those late-night college bull sessions — "Dude! Dude! The girls on The O.C. are all hot but if you HAD TO PICK JUST ONE..." — with the usual "Who's the next ___" talk.