Milestone reaches first close on Fund III

Milestone Venture Partners secured $28.5 million in the first close of what it hopes will be a $75 million third fund. The partial close of MVP III is a big step up from the New York-based firm’s previous two funds, weighing in at a combined total of $17 million. Milestone focuses on early stage venture deals and has backed such startups as health care software company CareGain, which Fiserv (Nasdaq: FISV) bought for an undisclosed amount in January; and Derivatives Portfolio Management, a financial services company that sold to Mellon Financial Corp. (NYSE: MEL) for $52 million in 2005. The company had raised $4 million from Milestone and Edison Venture Fund.

Milestone focuses on the northeastern part of the United States, hoping to catch startups south of the Massachusetts technology hubs. “There is much less pressure from competitive capital than in other major VC markets,” says Milestone General Partner Richard Dumler.

The firm was co-founded by Edwin Goodman, who was employee No. 3 at Patricof & Co.