The tough climate for venture fundraising has claimed one of Seattle's better known venture capital firms. Frazier Technology Ventures will slowly wind down operations after nearly a decade in business, a decision that was made as the firm struggled to raise a new fund.

The firm plans to continue managing existing investments, and partners will still sit on boards of portfolio companies. But Frazier Technology will no longer make new investments in startup companies. That's a tough pill for some of the partners to swallow.

"It is unfortunate, but it is reality too," said general partner Paul Bialek. "The prospects of being able to successfully raise a new fund were problematic at best."

Meanwhile, at least one of the firm's partners has found a new gig. Len Jordan, a former senior vice president at RealNetworks and a general partner at Frazier, plans to become a venture partner at Madrona Venture Group in Seattle.

Jordan will start in that position early next year.

The 43-year-old venture capitalist also plans to hold onto his title at Frazier, continuing to serve on the boards of companies such as Control 4, DS-IQ, Medio and Wetpaint.

That could create some interesting dynamics, especially if Madrona and Frazier portfolio companies go after similar buyers, customers or management talent. But Madrona's Matt McIlwain said they've taken steps to minimize any potential conflicts.

"We have tried to be very thoughtful of that," he said. "

An offshoot of the much larger Frazier Healthcare Ventures, Frazier Technology Ventures raised a $104 million venture fund in 2004. That fund has a 10-year life cycle, so it is likely that it will officially come to an end in 2014.

Len Jordan

We'd heard that the firm had suspended fundraising efforts earlier this year, but at the time partners at the firm didn't want to talk about it.

Frazier Technology Ventures was started in 2000 by Alan Frazier and Dan Rosen, and to date it has backed companies such as SnapIn Software, Smilebox, Socrata and Docusign. It now has 11 active portfolio companies.

In addition to Jordan and Bialek, former Intel Capital executive Scott Darling served as a partner. Bialek said he and Darling have not decided what they plan to do next, but he added that they both now have "capacity to figure out what we do with our time."

Jordan said he has an immense amount of respect for the other partners at Frazier, and he still believes there are some great companies in the portfolio. But he said the firm ran into troubles raising another fund because of the overall tough fundraising conditions, as well as the relatively short history of the firm.

Many industry watchers have predicted a shakeout in the venture capital business, one which could lead to fewer firms and less capital from the big pension funds and endowments that have supported the industry in the past.

And while that transformation is certainly occurring on a broader scale, Madrona Venture Group continues to bolster its ranks. In August, the firm added former aQuantive CEO Brian McAndrews as a managing director and just last month it promoted two investments professionals (Tim Porter and Scott Jacobson) to the role of partner.

McIlwain said there's no specific plan to bulk up right now, but when "exceptional talent" comes available you have to "jump all over that." The firm -- which plans to celebrate its 15th year in 2010 -- is currently investing out of a $250 million fund.

Jordan said he'll be spending some of his time sourcing deals in categories such as mobile, advertising, Web services and smart grid technologies. And while there's a lot of chatter about the venture capital model being broken, Jordan for one is quite optimistic.

"I think the venture business -- the best days are ahead of it," he said. "I've been involved in the software business since 1987. And I've been part of some big waves (in technology) ... and I think the waves in front of us are bigger and more interesting."

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