Union Square Ventures, the New York-based firm known for its early bets on Twitter and Zynga, is raising up to $200 million for a new fund that will invest in later-stage companies. It also has hired a new partner to work on later-stage transactions: John Buttrick, an attorney and angel investor who served as a partner with LiveWire Ventures between 2000 and 2004.

Existence of the fund was first disclosed earlier today in a regulatory filing, and my initial assumption was that this simply was the firm’s third early-stage vehicle (which it also is in the process of raising). But a source familiar with USV told me differently, and the addition of Buttrick seems to confirm that information. LiveWire Ventures might sound like it’s beating the bushes for startups, but it actually was a private equity firm that acquired mid-sized software companies, with the financial backing of buyout titans Thomas H. Lee Partners and The Blackstone Group.

The regulatory filing also reports that USV so far has secured around $135 million in capital commitments for its later-stage effort. It is unclear if the $200 million target is really a goal, or simply an upper ceiling used to provide some legal and/or accounting breathing room (an entirely common tactic, in order to preclude the need for costly amended filings later on). What I do know, however, is that USV is seeking to raise around the same amount for both this fund and its third early-stage vehicle, which firm co-founder Fred Wilson has said won’t be too much larger than the $156 million raised in 2008 (USV raised $125 million for its debut fund in 2004, so an increase to $200 million might actually be proportional).

I reached out to Wilson for comment via email. His reply: “We cannot comment at this time because we’re still in the process of raising the fund. We look forward to giving you a full report when that process concludes, which is expected later in January”

So those are the “what.” As for the “why,” I’m a bit puzzled.

To be sure, USV sees plenty of later-stage dealflow that doesn’t fit its traditional investment mandate. Moreover, the firm’s small fund sizes have prevented it from participating in large follow-on rounds for existing portfolio companies (like the recent one for Twitter), and my understanding is that the early-stage and later-stage investor base is virtually identical (cross-fund investing with different LPs can cause fiduciary conflicts).

But sticking to that early-stage knitting is one of the things that has helped USV stand apart, alongside fellow upstarts like First Round Capital, Foundry Group and True Ventures. In fact, many of those firms were launched specifically to counteract the trend of early-stage investors moving further downstream (less risk, less reward).

Wilson himself seemed to take a shot across the bow of later-stage firms just two weeks ago — plus growth equity converts like Kleiner Perkins — with a blog post about how investors need to avoid “doubling down on the overpay.” How exactly will USV’s new “Opportunity Fund” avoid falling into that very trap? It can’t simply be by cross-investing in later-stage rounds of Twitter and Zynga — no need to hire Buttrick for that — and it would be hubris to think that USV could have a plethora of proprietary later-stage opportunities in such a hyper-competitive market.

Perhaps USV will try navigating the tricky ground between later-stage investing and late-stage investing (yes, there is a difference), which Wilson recently described in another blog post titled “Invest in the Mess.”

I’m sure that Wilson and company will explain all soon, and that they aren’t simply doing this because they can. The firm’s partners are known for thinking very long and hard about VC industry issues but, for me, the initial reaction is a giant question mark.