Kevin Hartz is often the first to spot new opportunities. Back in 2001, he helped launch Xoom at a time when transferring money internationally meant waiting in line at Western Union. Xoom went public in 2013, and PayPal acquired it for $1.1 billion two years later. Just four years after starting Xoom, Hartz co-founded Eventbrite, which debuted on the stock market in 2018 and made buying event tickets a far less frustrating experience.
Following a period at Founders Fund, Hartz started his own investment firm, A* Capital, named after a well-known computer science algorithm. In 2020, he anticipated the surge in SPACs before most others. His SPAC, “one,” merged with 3D printing company Markforged in a $2.1 billion deal in 2021, right as the rest of Silicon Valley jumped on the SPAC bandwagon.
Hartz’s latest focus is on investing in teenage founders—not as a social experiment, but as an emerging investment strategy. His firm recently invested in Aaru, an AI-driven prediction platform co-founded by someone who wasn’t old enough to drive at the time. Hartz isn’t alone in this approach. The trend of dropping out to start companies, popularized by figures like Steve Jobs, Bill Gates, and Mark Zuckerberg, is now a common path for ambitious young people.
Take Cory Levy, for example. He interned at Founders Fund, Union Square Ventures, and Techstars while still in high school, then left the University of Illinois after his first year. Today, he leads Z Fellows, a week-long accelerator that gives $10,000 grants to technical founders, including high school students. When Levy left college a decade ago, the Thiel Fellowship was a novel concept. Now, he told Business Insider last spring, “the dropout community is bigger than ever. At a dinner with 15 or 20 people, you’ll notice no one at the table has a college degree.”
This trend has grown so much that Y Combinator, which has long supported drop-out culture, recently introduced a program for students who want to build startups but prefer to stay in school. The initiative lets students apply, receive funding, and postpone their YC participation until after graduation. (For YC, known for going against the grain, this move fits perfectly.)
TechCrunch has been following this movement closely: see here and here and here. To dig deeper, I’ll be interviewing Hartz at the StrictlyVC event during TechCrunch’s lively Disrupt conference, which starts in San Francisco on Monday, October 27. (Hartz will speak on Tuesday, October 28.)
Meanwhile, here are some highlights from our conversation last Friday, where we began to unpack this topic:
TC: Teenagers have always started companies, but it definitely seems like it’s happening more often now, and you’re saying that’s true behind the scenes. Why do you think this is?
Kevin Hartz: There are some exceptionally talented young people who are just not engaged by school. I see Stanford freshmen and sophomores who fit this description—they were bored, some switched to homeschooling, and excelled. Even at elite universities, some students drop out because they’re eager to create, learn, and push boundaries. We backed a company where the founders were 18, 18, and 15. The CTO was 15 at the time, probably 16 now. But that’s not unusual anymore.
How does Z Fellows differ from the Thiel Fellowship, which Peter Thiel started years ago?
They’re very much alike. The main distinction is that the Thiel Fellowship is a nonprofit. I’m a big supporter of Peter, but nonprofits might not push as aggressively. Cory has been actively building Z Fellows in recent years, and it’s an excellent program. Once again, Peter was ahead of the curve, recognizing the value in the paradox of paying people to leave school. This trend keeps growing, especially as college costs rise and many view universities as having problematic environments and poor leadership. All of this encourages teenagers to wonder, ‘Why not just drop out and build something?’
Does Z Fellows take equity from the startups?
They provide a relatively small initial grant—$10,000. There’s also a fund to support founders later. But the initial $10,000 comes with no strings attached. I believe Cory also selects a few people to invest $100K in at the pre-seed stage.
What do you think about the data showing that many young people can’t find jobs after graduation? Do you think this realization is pushing more to start companies?
There’s another shift happening—by 2026 or 2027, it’s expected there will be more people working as independent contractors than as employees. Decades ago, most people worked for large firms like Nestlé, McKinsey, or IBM. Now, many are self-employed, trading crypto or launching their own ventures. This reflects a surge in American individualism. It’s almost as if the U.S. is entering an era of intense entrepreneurship.
I think people are drawn to entrepreneurship, but it also seems like more are forced into it as automation and AI make traditional roles obsolete.
Paul Graham once said it’s both a blessing and a curse for young founders when their startups succeed, because it takes over their lives. You started young yourself. How do you feel about backing a 15-year-old, knowing their company could take off and they might miss out on experiences most teens have?
For me, it was a thrilling journey, but it came with tough moments. Everything is amplified. And that’s a valid concern. Seventeen is the age the Marines send people into combat because they’re fearless. Maybe there’s something about that age that drives people to push hard. But since this is a recent trend, it’s probably too early to know the long-term effects.
We’re only at the start of what I’d call a major wave of innovation in tech, especially with AI. It’s still early days. Companies like OpenAI and Anthropic are expanding rapidly in foundational AI models. Now, the focus is shifting to building applications. There are tools like Cognition for coding, and Decagon and Sierra for AI-powered CRM. But there are countless other sectors still waiting for disruption. Even Sierra and Decagon are just beginning their journeys.
You have daughters. Would you want them to go to college? How would you react if they said, “Dad, I want to start something now and skip college”?
Our 17-year-old is currently applying to colleges. She’s interested in the college experience and the lifestyle it offers. She never really questioned it. I’ve tried to encourage her to consider other options, and I’ll do the same with our 13-year-old when the time comes.
Of the investments you’ve made in the past year, what percentage involved teenage founders?
Nearly 20%.
And what about two years ago?
Roughly 5%.
