Why Foundry Group is raising another $225 million

August 19, 2013, 5:42 PM UTC

FORTUNE — Earlier this month we spotted a regulatory filing from Foundry Group, suggesting that it had $218 million in commitments for a new $225 million-targeted fund. Seemed different than the Colorado-based firm’s typical early-stage investing efforts, given: (a) Foundry had raised a new $225 million fund just last fall, and (b) The new effort was called “Foundry Select Fund,” rather than “Foundry Group IV.”

So we’ve done some digging, and learned that this is basically an overage fund. In other words, Foundry Select will invest additional capital into existing Foundry Group portfolio companies. Basically a way to maintain pro rata when an early-stage portfolio company gets huge, or perhaps even to lead later-stage insider rounds. Foundry is not charging management fees for “Select Fund,” but there will be carried interest.

Foundry is hardly the first firm to do such a thing, although it can get a bit tricky if the LP base is not identical to the early-stage fund LP base, due to potential cross-fund conflicts of interest (so I’ll assume it will be).

One of Foundry’s partners is an attorney who understands that the anti-solicitation rules remain in place for a few more weeks, so no comment out of Boulder.

Foundry is best-known for its early bet in Zynga (ZNGA), AdMeld (acquired by Google) and MakerBot (acquired by Stratasys). Current portfolio companies include FitBit, FM Publishing, MongoLab, SendGrid and Sifteo.

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