PE Week confirms here that VSP Capital is indeed folding. Brings to an end one of the few Silicon Valley venture firms run by a woman:

VSP Capital has asked its limited partners to cease financial backing for the firm’s $185 million fund III, firm founder Joanna Rees-Gallanter told PE Week on Tuesday. It was her first formal comment following PE Week’s report that VSP’s LP advisory board effectively agreed to discontinue Fund III.

�In light of the triggering of the key man provision, the senior management of VSP Capital has recommended to the firm’s limited partner advisory board to discontinue further investments in VSP III and concentrate resources on the firm’s existing portfolio companies,� Rees-Gallanter wrote in an email to PE Week.

See some our past coverage, see here (a story for which we interviewed Gallanter), here, and here.

Update: Well, saga is not entirely over. Now the firm has to deal with its baggage: The battle for control of the firm’s investments from its earlier fund II has already begun, according to a PE Week. Gallanter and Hamm reportedly want control, but it will be up to LPs.