Prism VentureWorks has suspended efforts to raise its sixth fund, peHUB has learned. The Needham, Mass.-based firm sent out placement memoranda last August with a $275 million target, but ran into strong LP liquidity headwinds. It still has enough dry powder to make new investments out of its $250 million fifth fund (2005), plus a reserve pool for follow-on transactions.
Prism also has the option of recycling profits from Fund V exits, which so far include Maven Networks, M:Metrics and Proteon Therapeutics. Within the portfolio, Prism’s highest hopes may be for Trius Therapeutics Inc., a San Diego-based developer of antibacterial drugs.
“We plan to spend the next year focusing on our portfolio companies, and evolving the firm,” says Woody Benson, a general partner with Prism since 2004. “I don’t know exactly what that evolution will mean for us, but the venture world is obviously beginning to change, in terms of things like new models.”
Benson added that the aforementioned “evolution” is not expected to include layoffs of investment staff.
I had been hearing for a while that Prism’s fundraising success/failure was largely hinged on whether it could get a new commitment from certain public institutions in New York, including NYS Teachers’ Retirement System and the New York City pension funds.
Benson didn’t dispute that, saying that many of those groups have virtually suspended new commitments for the time being: “If we were out of cash and desperate for a new fund, maybe we would have waited for some of them to invest, or maybe tried closing on our soft circles. But we’re not in that situation, and we’re extremely bullish on our portfolio. As I told LPs during our annual meeting last week, if you plan on selling us on the secondary market, call us first.”