Prism: One More Local VC Firm Hits Fundraising Brick Wall

Dan Primack at PEHub reported yesterday that Prism VentureWorks of Needham has put fundraising for its sixth fund on hold. Primack wrote:

“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.

Benson joined what used to be Prism Venture Partners in 2004. The company was still led by co-founder Bob Fleming in 2005, when it raised its fifth fund ($250 million.) Fleming is still listed on the Prism Web site, but he effectively left in 2006 along with Duane Mason, another founder of the firm. Benson then took the reins, and started focusing more on what he dubbed "digital living" investments.

There have been a few successes in Fund V, PEInsider observed last year, including selling "Softricity to Microsoft in 2006 for an undisclosed amount and video-hosting company Maven Networks to Yahoo this year for $160 million - both of which yielded more than three times its investments."

If Prism isn't eventually able to raise a sixth fund, the Boston VC scene gets a little bit smaller.

All eyes right now are on Highland Capital and Polaris Ventures' fund-raising efforts...Primack at PEHub reported last month that Highland is trying to raise a smaller $400 million fund; the firm's last fund, raised in 2006, was $800 million.