Indie.vc, an effort launched six years ago to invest small amounts in bootstrapped businesses, announced on Tuesday that it’s winding down.

Why it matters: Venture capital, despite being the money of innovation, is rarely innovative itself. Indie.vc was an effort to break out of the tedium, so its failure is de facto disappointing.

History: Indie.vc was launched in 2015 as a pilot program by O'Reilly AlphaTech Ventures, which was a typical early-stage VC firm. Its focus was sustainable — and often profitable — businesses that could use a capital boost but weren’t looking to hyperscale. It also allowed founders to buy back their stakes via “redemptions.”

• The idea was to back the next GitHub, which became profitable early on and didn’t take any VC money for its first four years.
• "There needs to be something that sits in between banks and venture capital blitz," AOTV managing director Bryce Roberts tells Axios’ Kia Kokalitcheva.
• It initially began operating out of OATV's $85 million third fund, and has invested in nearly 40 companies.

What happened: Limited partners were unimpressed, particularly as many of their other VC fund bets kept minting overnight unicorns. They basically wanted OATV to maintain its status quo.

• When OATV announced its fourth fund would focus on the Indie.vc model, it lost around 80% of its investor base — which came in at just $25 million versus the $85 million secured for Fund III.
• One issue was that Indie.vc portfolio companies didn't raise follow-on rounds as quickly as did traditional VC-backed startups, which resulted in fewer mark-ups and slower fund IRR growth. Another was that the investment structured blurred the lines between equity and debt, and LPs love their buckets.
• "I really bought into the idea that we needed to be completely detached from the mainstream VC narrative instead of being more complimentary and more of an on-ramp to growth equity,” Roberts explains.
• Raising Fund V proved untenable, leading to yesterday's announcement.

The bottom line: Indie.vc deserves kudos for the attempt to do something different, despite how it turned out.

• Traditional venture capital works great for certain sorts of startups, but not for all. Hopefully Indie.vc's death won't put a chill on other efforts to create alternative structures.