It Takes a Village To Raise an Annex

Village Ventures is the latest firm to shy away from raising a new fund in turbulent waters, instead opting to top off an existing pool of capital.

peHUB has learned that the Williamstown, Mass.-based firm so far has secured $27 million in new commitments from existing limited partners, which will be added to a $105 million Fund II that originally closed in 2006. VIllage Ventures had been targeting just $20 million, and has not yet decided what the final number will be.

Village Ventures makes seed and early-stage investments in three sectors: Consumer media and retail, healthcare and financial services. It tries to stay away from “traditional” VC hotbeds like Silicon Valley and Boston, preferring what it refers to as “less competitive markets.”

It also is the flagship firm of the Village Ventures network, which includes more than a dozen independent venture firms with either a tight geographic or sector focus (the funds all share certain back-office functions).

I was at a meeting of the network firms last week, and one partner (whose firm shall remain nameless) mentioned that the model will likely prove itself a success or failure in the next 12-24 months. That’s just about the same time that Village Ventures will likely exhaust its annex fund, which means LPs should have a better sense of if they want to support a Fund III.