After raising a total of $11.2 million since its founding in 2005, Tiny Pictures sold to Shutterfly on Friday for $1.3 million in cash and another $1.3 million in restricted stock to employees, which has some performance triggers. If you back out the earnout, investors only got back about a tenth of what they put in.

Those investors include Mohr Davidow, Draper Fisher Jurvetson, and angel investors Reid Hoffman, and Joi Ito. The company’s last venture round was $7 million led by Draper Fisher in February, 2008. But Mohr Davidow, which held preferred shares, might have been the only investor to see any of those proceeds at all. Shutterfly disclosed the acquisition in an SEC filing, which only mentions Mohr Davidow as a recipient of some of the $1.3 million in cash.

It also mentions that Nancy J. Schoendorf, a managing partner at Mohr Davidow, sits on the boards of both companies. Although she did not vote on the acquisition, the connection raises the question of whether or not Mohr played a role in bring the deal to Shutterfly in the first place.

Tiny Pictures operates Radar, a mobile photo sharing app which never got a lot of traction beyond a core following. The service is actually pretty slick, centered around a photo commenting stream. You snap photos with your mobile phone which instantly is shared with your friends who also have the app. They can then comment on the photos.

It sounds simple enough, but the app never achieved a critical mass of users. The service is focused more on sharing life moments through photos with people you actually know than creating a public photo stream. So if you don’t know anyone who uses it, there is little reason to join yourself. The friends-and-family aspect must have appealed to Shutterfly, however, which is based on exactly that type of picture sharing. It already has a rich database of people who like to share photos with one another. Radar helps them extend that to mobile phones in a social and fun way.

Update: Tiny Pictures CEO John Poisson confirms that he will remain with the company at Shutterfly as VP, Tiny Pictures. He says that Mohr did not broker the deal in any way and that other preferred shareholders, including Draper, Hoffman, Ito, and himself, also saw some of the proceeds of the sale. As to what he’ll be doing at Shutterfly, he is kind of vague, but it has something to do with mobile social media, sharing photos, and self-expression.

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Tiny Pictures operates the mobile photo-sharing service Radar, which lets members comment on each others camera-phone snapshots. Radar serves up 15 million mobile photos a month worldwide. Last November, the company introduced advertising in the form of public photo streams that movie studios and other companies try to get people to pay attention to. Blacked Eyed Peas singer will.i.am recently joined the company’s advisory board.

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This only works, of course if you A) have friends on Radar, and B) they post pictures on a regular basis. Radar, which launched more than a year ago in the summer of 2006, has only 600,000 users worldwide. But that number has been doubling every month for the past three months. So we might be at an inflection point here, especially as more capable phones come onto the market that can take advantage of its Web-like features. Radar serves 250,000 pictures and videos a day. Eighty percent of its traffic comes from mobile devices (it also has a regular Website), and 70 percent of its users are outside the U.S.

While most of the conversations and photos on Radar are private, you can choose to make them public. And today the company is also launching a public gallery, where advertisers can try to entice Radar members to subscribe to their photo streams. Right now, there are photo streams for the upcoming movie Hitman, pictures of frivolous but funny merchandise from iWoot, top video picks from Vimeo, and CEO John Poisson’s own Radar stream. There will soon be Radar channels from Hendrick’s Gin, iTunes, and the stealth Web video series Nowhere Men (which will focus on a group people “missing” since 2002 and the audience has to help unravel the mystery). This sort of advertising will only work in so far as people don’t see it as advertising, which is why I like it.

Here is a page from Poisson’s Radar channel. Taking picture of food seems to be popular on the site:

And here is what Radar looks like on a regular Sony Ericson phone:

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