San Francisco, CA – Early-stage venture capital firm A* Capital announced the close of its third fund, Fund III, with $450 million in committed capital. The new fund, which represents a significant increase from its previous $315 million Fund II in 2024 and $300 million Fund I in 2021, will focus on investments across AI applications, fintech, healthcare, and security. It aims to back at least 30 startups with an average check size between $3 million and $5 million over the next two to three years.
The firm, co-founded by serial entrepreneur Kevin Hartz and former Coatue partner Bennett Siegel, is known for its operator-heavy leadership and a generalist approach. Hartz, who co-founded Xoom and Eventbrite, and Siegel, with a background at Boston Consulting Group and Altamont Capital Partners, bring extensive experience in company building and growth investing. The firm also includes Gautam Gupta, former head of finance at Uber, as a co-founder and general partner.
A* Capital has notably invested in companies such as Notion, Mercor, and Ramp, and has garnered attention for backing unusually young founders, with nearly 20% of its current portfolio led by teenage entrepreneurs. This focus aligns with a broader trend of identifying talent over traditional market mapping. The firm's strategy emphasizes a disciplined approach to portfolio construction, contrasting with the multi-billion-dollar funds raised by some larger VC firms.
The announcement comes amidst a dynamic venture capital landscape characterized by a significant concentration of capital in AI. Recent reports indicate that AI accounted for a substantial portion of global VC investment in early 2026, with mega-deals dominating headlines. However, this environment also presents opportunities for early-stage specialists like A* Capital, who can make selective, high-conviction bets.
The firm's new fund positions it to capitalize on the continued surge in AI innovation and other key technological advancements. Limited partners in Fund III include nonprofits, foundations, and endowments, with Carnegie Mellon University publicly named as a backer. This successful fundraise underscores sustained investor confidence in A* Capital's strategy and its ability to identify and nurture promising early-stage ventures.
