In raising its seventh fund, Frazier Healthcare took the advice of LPs who suggested bigger is not always better. The fund closed last week at $377 million, overshooting its $300 million target but coming in well below the $600 million fund Frazier closed in 2007.

LPs are decreasing their venture exposure. But rather than exiting the space, they are getting more selective, according to Frazier's James Topper.