A* closed a $450 million Fund III this week, and the number itself barely tells the story. What matters is what the firm plans to do with it: back at least 30 early-stage startups across AI, fintech, healthcare, and security, with checks averaging between $3 million and $5 million.
The fund will deploy capital over the next two to three years, following the playbook that worked for its predecessors. A* raised a $315 million Fund II in 2024 and a $300 million Fund I in 2021. That’s roughly $1 billion in total capital for a firm that didn’t exist until 2020. That kind of velocity usually means something is working.
What’s working is Kevin Hartz and Bennet Siegel’s willingness to back founders that most traditional VCs would overlook or dismiss. Hartz, who co-founded Xoom (acquired by PayPal for $1.1 billion in 2015) and Eventbrite (IPO’d in 2018), brings credibility that extends beyond just having money to deploy. Siegel spent time at Boston Consulting Group, Altamont Capital Partners, and four years as a partner at Coatue Management before joining forces with Hartz. They’re not outsiders; they’re insiders with unusual convictions.
The Teenage Founder Bet
Here’s the part that gets attention, and probably deserves it. According to reporting from TechCrunch, Hartz mentioned that close to 20% of A*‘s current portfolio involves teenage entrepreneurs. That’s not a rounding error or a quirk. That’s a deliberate thesis.
The practice of backing young founders has become more common lately, but A* was early to make it central to their strategy. The firm has already backed companies like Ramp in fintech and Mercor in AI, proving the portfolio extends beyond just novel founder age demographics. These aren’t vanity investments; they’re bets on founders who might have structural advantages: less institutional baggage, more digital nativity, fewer reasons to think the impossible is actually impossible.
There’s something worth examining here about timing and market psychology. When the venture world was obsessed with founder pedigree and prior exits, A* was asking a different question: What if the real edge is just thinking differently because you haven’t been trained to think like everyone else?
LP Confidence and Capital Deployment
The limited partner base reads like a who’s who of institutional capital: nonprofits, foundations, and endowments backing the fund. Carnegie Mellon University is among the publicly named supporters. That’s not just money; that’s validation from institutions that have deep experience evaluating long-term bets.
The $450 million closure also signals something about the venture environment itself. Even in a landscape where mega-funds dominate headlines, there’s still appetite for generalist firms with a clear point of view and a track record of execution. A* isn’t pretending to be a seed-stage specialist or a crypto play or a geographic bet. It’s just saying: we back early companies across categories, we write checks you can actually work with, and we’re patient enough to let capital deploy over years rather than quarters.
That’s almost radical in its simplicity, which might be why it keeps attracting capital.
The real test isn’t whether A* closes another fund in three years. It’s whether the teenage founders they’re backing today actually change their respective industries or quietly flame out like most startups do. Until then, the thesis remains elegant but unproven at scale.
