Hartz Raises $450M on Eventbrite Nostalgia Alone

Kevin Hartz, the co-founder of Eventbrite—a company that went public at a $25 billion valuation in 2018 and now trades at roughly one-fifth that value—has closed his third fund at $450 million. Investors apparently decided that a decade-old IPO with underwhelming shareholder returns was the perfect résumé credential to entrust with half a billion dollars in fresh capital. A* Capital, Hartz's early-stage venture firm, will now deploy this capital into the market, presumably searching for the next Eventbrite: a company that will eventually achieve scale without ever achieving profitability or explaining why it exists.

For the uninitiated, A* Capital focuses on early-stage investments, which is venture-speak for "we invest in companies with zero revenue and a PowerPoint deck." This is not inherently disqualifying—early-stage investing exists for a reason. But the fundraising environment that permits a $450 million check to flow to a manager whose most famous exit resulted in a public company that has steadily disappointed shareholders for eight years suggests that LP capital has finally divorced itself from the concept of performance accountability. The question investors should have asked: if Eventbrite, despite its "unicorn" pedigree and proven founder, couldn't generate consistent returns post-IPO, why should a Hartz-backed early-stage bet succeed where that didn't?

This is Hartz's third fund, which means A* Capital has already deployed two previous pools of capital into startups. The press release celebrating Fund III—released without apparent irony about Fund I and II's performance metrics—notably avoided mentioning those funds' returns, DPI, or exit outcomes. In the late-stage venture boom of 2020-2021, when dry powder was virtually a pejorative term, this silence might have been acceptable. Today, with LP scrutiny tightening and smaller VC funds struggling to raise, the absence of a track record discussion feels less like modesty and more like strategic omission.

The fundraising announcement relied on the eternal venture capital truism: branding as substitution for results. Hartz presumably told investors that his "network," "operator mentality," and "pattern recognition" would yield outsized returns, translated from founder-speak as "I once created something that went public, so trust me." The $450 million presumably came from institutional LPs—pension funds, endowments, family offices—whose investment committees were apparently convinced that founder pedigree is a sufficient substitute for demonstrated fund-level returns. One wonders what materials A* presented comparing Fund I and Fund II performance to the broader early-stage median. Those PowerPoints were probably not in the press release.

The arithmetic of a $450 million early-stage fund is punishing. To justify its existence on a standard 2-and-20 fee structure, Hartz needs to generate roughly $1.4-2 billion in returns over a ten-year period—a 3-4x net multiple. Early-stage investing is probabilistic; many portfolio companies fail, a few succeed moderately, and rarely does one unicorn exist. The odds improve with founder skill, but founder skill and Eventbrite's public stock performance move in different directions. If Hartz's decision-making was truly superior, shouldn't his most famous company have performed better in public markets?

This deal epitomizes the current venture capital moment: a moment where brand recognition, founder mythology, and institutional FOMO have reasserted dominance over empirical returns analysis. The LP community, having suffered through 2022's valuation reckoning and 2023's portfolio company downgrades, has apparently decided that the solution is not more rigor but more trust in people who've "been there before." A* Capital's $450 million Fund III will deploy capital into startups, most of which will fail, a few of which will return multiples, and perhaps one will eventually go public, disappoint shareholders for a decade, and vindicate its founder's next fundraise.

In venture capital, it turns out, success is not a prerequisite for scale—availability is.