Mr. Harris

Village Ventures is breaking up. Sort of," Dan Primack writes in his Term Sheet newsletter this morning. The New York City-based early stage venture capital firm, which invested in notable startups like Dwolla, Zipmark, On Deck Capital, and Simple, will be losing co-founders Matt Harris and Bo Peabody. However the fund's administration office, based in Williamstown, Massachusetts, will remain open "for the foreseeable future."

Mr. Harris will be rejoining Bain Capital Ventures (the VC arm of the private equity firm founded by Mitt Romney), while Mr. Peabody will be moving to Greycroft Partners. Rather than citing consolidation in the VC sector (with the rich and well-connected getting more funding and deal flow), Mr. Harris tells Mr. Primack that it had more to do with lack of a coherent and scalable investment philosophy:

Harris tells me that Village’s original investment thesis was that you need to be a leader in something, whether that be sector or region. But the reality was that Harris was best at financial services, while Peabody focuses on digital media. Moreover, Village created a network of affiliated regional and sector-specific funds that used shared back-office services (including Greycroft), with the idea that Village itself would invest in deals that were outside of an affiliated fund’s particular region. “It wasn’t really an idea that successfully scaled,” Harris explains.

The Village network, however, is now comprised of 14 firms. Both Mr. Harris and Mr. Peabody will continue to serve on the boards of Village Ventures' existing portfolio companies. However, the firm "will not be making any new investments nor raising a new fund."

While Mr. Peabody's time at Greycroft will be split between L.A., where the firm is fairly active, and New York, Mr. Harris will lead Bain Capital Venture's New York City office where, the company's press release says, Mr. Harris "will focus on early and growth stage investments in the financial services sector." Like you needed another reason to quit your gig at Goldman.