As Some VCs Run On Empty, Others Are Topping Off The Tank

As liquidity remains scarce and long-term returns from venture funds are at best proving lukewarm, some limited partners are losing confidence in the venture capital model. For biotech and health care-oriented venture, new money is increasingly hard to come by, with smaller commitments from pension funds, university endowments and other traditional suppliers of capital. ( See "Biotech Backers Are Learning to Live with Exit-by-Earn-out," START-UP , March 2010 Also see "Biotech Backers Are Learning to Live with Exit-by-Earn-out " - Scrip, 1 March, 2010..) With increasing frequency, firms are capping their newest funds short of already-reduced expectations.

Among the latest to aim for a more modest fund is Polaris Venture Partners, which has raised the first $233...