Millennium Beats Target for Third Fund

Millennium Technology Ventures was expected to hold an oversubscribed final close on its third fund last month. The firm launched its fund-raising efforts with a $200 million target and $250 million hard cap, but has gathered at least $275 million in commitments, according to two sources familiar with the situation.

The New York-based firm declined to comment on its fund-raising, which was expected to wrap up in late April.

The latest fund marks the first time Millennium has accepted capital from public pension funds.

The fund held an interim close on $75 million from 40 investors as of Feb. 2, 2009. Called Millennium Technology Value Partners II, the fund is the third vehicle raised under the firm’s “liquidity solutions” strategy.

Millennium raised $130 million in commitments for its previous fund, which closed in 2006.

The firm—co-founded by Daniel Burstein and Samuel Schwerin, who previously managed several small funds when they were at The Blackstone Group—works directly with VC-backed companies to develop situation-specific investments, often buying illiquid stakes from founders, employees, angel investors and other venture firms. Its second fund has backed at least seven companies: DataPipe Inc., eHarmony.com Inc., Facebook Inc., Fonality Inc., LiveOps Inc., Rearden Commerce Inc. and Zappos.com Inc., according to Thomson Reuters (publisher of VCJ).

Millennium’s second fund has had just one exit to date. Online shoe retailer Zappos.com was bought by Amazon.com for $928 million last year. It isn’t clear how Millennium fared on that deal. It participated in just one of Zappos.com’s six rounds, investing an undisclosed amount in April 2009, according to Thomson Reuters. —Erin Griffith