Early-stage investment firm Village Ventures is breaking up. Sort of.

Village co-founders Matt Harris and Bo Peabody yesterday announced that they each would go their separate ways, with Harris rejoining Bain Capital Ventures and Peabody teaming up with Greycroft Partners. Each will continue to serve on the boards of existing Village portfolio companies, but the firm will not be making any new investments nor raising a new fund.

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 fund administration business, based in Williamstown, Mass., will remain in operation “for the foreseeable future.” In addition to Greycroft and Village Ventures, the Village network includes 14 firms.

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