Kevin Hartz often leads the way. In 2001, he established Xoom, at a time when sending money internationally required waiting in line at Western Union. It went public in 2013, and in 2015, PayPal acquired it for $1.1 billion. Just four years after introducing Xoom, he launched Eventbrite, which became publicly traded in 2018, transforming the ticket-buying experience into a hassle-free process.

Following a period at Founders Fund, Hartz founded his own investment firm, A* Capital (named after a computer science algorithm). In 2020, he recognized another emerging trend: the SPAC surge. His blank-check venture, “one,” acquired 3D printing company Markforged in a $2.1 billion reverse merger in 2021, coinciding with the moment every other financier in Silicon Valley suddenly deemed SPACs as essential.

Currently, Hartz is focused on teenage entrepreneurs, not as an experiment but as an unexpected investment strategy. His firm recently invested in Aaru, an AI-driven prediction platform with a founder who was too young to obtain his driver’s license at the time. Hartz is not isolated in this endeavor. The dropout-and-build movement, popularized by founders such as Steve Jobs, Bill Gates, and Mark Zuckerberg, is now a common lifestyle choice for a specific group of ambitious youth.

Take Cory Levy, who interned at Founders Fund, Union Square Ventures, and Techstars while still in high school, then left the University of Illinois after his first year. He now operates Z Fellows, a one-week accelerator providing technical founders — including high schoolers — with $10,000 grants. When Levy dropped out a decade back, the Thiel Fellowship was a groundbreaking concept. Now, the “community of dropouts is at an unprecedented high,” he revealed to Business Insider last spring. “At a large group dinner of 15 or 20 people, we’ll glance around the table, and no one holds a college degree.”

This trend is gaining such traction that the accelerator Y Combinator, which has subtly supported dropout culture since its inception, recently introduced a program designed for students aspiring to launch companies without leaving school. This initiative allows them to apply while still enrolled, gain acceptance and funding immediately, and postpone their involvement in YC until after graduation. (For YC, known for its countercultural ethos, this move aligns perfectly.)

Not surprisingly, TechCrunch has been reporting on this trend: see here and here and here. To delve deeper, I’ll chat with Hartz at the StrictlyVC gathering during TechCrunch’s energetic Disrupt event, commencing in San Francisco on Monday, October 27. (Hartz is scheduled to speak on Tuesday, October 28.)

Meanwhile, here are highlights from a conversation we had on Friday as we began to delve into the subject:

TC: Teenagers have always launched businesses, but it undeniably seems like we’re witnessing more of it than ever, and you’re indicating this is true behind the scenes. What do you believe accounts for this?

Kevin Hartz: You discover these exceptionally bright youths who feel quite uninterested in school. I observe Stanford freshmen or sophomores who fit this description — they were utterly disengaged, some even resorted to homeschooling, and excelled. Even in prestigious universities, they still leave to pursue their desire to create, learn, and innovate. We supported one firm where the founders were ages 18, 18, and 15. The CTO is now probably 16, but at the time we invested, he was just 15. But that isn’t particularly unusual.

How does Z Fellows stack up against the Thiel Fellowship, established years ago by Peter Thiel?

It’s immensely comparable. The distinction is that the Thiel Fellowship is a nonprofit, and — I truly admire Peter — but as a nonprofit, it may not pursue opportunities as aggressively. Cory has been tirelessly building Z Fellows over recent years, and it’s an excellent program. It reflects Peter’s foresight in recognizing the irony of providing funds to dropouts. This trend has been expanding and evolving, and who knows how much further it will go, particularly with rising university costs and many perceiving a detrimental atmosphere in universities due to inadequate administration. All of this converges to compel teenagers to ponder, ‘Why not drop out and create?’

Does Z Fellows take equity in the businesses?

They provide a modest amount — $10,000. Then there’s a fund that supports individuals later on. It’s primarily a no-strings-attached $10,000 seed contribution. I believe Cory selects a few individuals for $100K investments into pre-seed [rounds] as well.

What are your thoughts on the statistics showing young people struggling to secure jobs after graduation? I assume part of this stems from the realization that even with a degree, jobs may be hard to find.

Another phenomenon is materializing — a shift anticipated around ’26 or ’27 where there will be more 1099s than W-2s. This suggests that three decades ago, people worked for major corporations like Nestlé or McKinsey or IBM. Nowadays, they’re becoming self-employed. They’re trading cryptocurrency or establishing their own enterprises. This trend highlights American individualism. It almost appears that the United States is entering a phase of extreme entrepreneurship.

While I believe people aspire to establish companies, I also think many are compelled to do so as they are sidelined from traditional roles due to efficiencies gained through AI and other advancements.

Paul Graham remarked years ago, something that has lingered in my mind, that it’s both beneficial and detrimental for a young founder when their startup succeeds, as it overtakes their life. You were a young entrepreneur. What’s your perspective on funding a 15-year-old, knowing their venture might succeed and this individual might miss out on typical experiences of most 15-, 16-, or 17-year-olds?

I found it to be an exhilarating journey, yet fraught with painful obstacles. It amplifies everything. And that’s a valid observation. [Seventeen] is the age when Marines are sent into combat because they’re fearless. Perhaps there’s something about that age that drives people intensely. But I wonder if it’s premature to grasp the ramifications, considering how recent this trend is.

We’re merely at the outset of what I would term a super cycle of growth in technology, especially with AI and all that encompasses it — particularly AI. We’re in the very early phases. You have OpenAI and Anthropic expanding rapidly in the foundational model area. Now we’re beginning to concentrate on the application layers. You have coding co-pilots like Cognition, and then Decagon and Sierra in the AI CRM sector. Yet, many other categories remain ripe for disruption. Even Sierra and Decagon are still in the nascent stages of their endeavors.

You have daughters. Would you prefer to see them attend college? How would you react if they declared, “Dad, I want to start something now and bypass college”?

Our 17-year-old is currently applying to colleges. She desires the college experience. She craves that aspect of life. She has never truly questioned it. I’ve tried to provide her with various opportunities to consider alternatives, and I will do the same with our 13-year-old when her time comes.

Of the investments you’ve made in the past year, how many would you estimate involve teenagers?

Approximately 20%.

And what percentage would you have stated two years ago?

Roughly 5%.