Picture this: A Silicon Valley veteran who helped turn international money transfers and event ticketing into billion-dollar exits is now writing checks to kids who can't legally drive. Kevin Hartz—co-founder of Xoom (sold to PayPal for $1.1 billion) and Eventbrite (IPO'd in 2018)—isn't running a charity. He's making a calculated bet that 20% of his venture portfolio should go to teenage founders. Two years ago? That figure was 5%. Welcome to the new frontier of American entrepreneurship, where the youngest Marines of capitalism are storming the beaches of Silicon Valley—and investors are handing them live ammunition.

From Xoom to Zoom Calls with 15-Year-Olds: Hartz's Unlikely Evolution

Hartz has always been early to the party. In 2001, when cross-border payments meant standing in Western Union lines like it was the Great Depression, he co-founded Xoom. After Founders Fund, he launched A* Capital—named after a computer science pathfinding algorithm, because of course it is—and caught the SPAC wave in 2020, merging his blank-check company with 3D printing outfit Markforged for $2.1 billion. Now he's backing Aaru, an AI prediction engine where the CTO was 15 years old at the time of investment. Not 15 in dog years. Actual human years. The kid probably had algebra homework when the term sheet got signed.

This isn't some eccentric side project. Hartz is dead serious, and he's not alone. The dropout-and-build movement—immortalized by Jobs, Gates, and Zuckerberg—has evolved from Silicon Valley folklore into standard operating procedure for ambitious Gen Z. According to the Global Entrepreneurship Monitor's 2024-2025 U.S. report, young adults aged 18-24 show the highest startup rates in America at about 24% Total Early-stage Entrepreneurial Activity. That's not a rounding error. That's a generational shift.

Why Venture Funds Are Betting the Farm on High Schoolers

The Dropout Industrial Complex Goes Mainstream

Consider Cory Levy, who interned at Founders Fund, Union Square Ventures, and Techstars while still in high school, then bailed on the University of Illinois after freshman year. Today he runs Z Fellows, a one-week accelerator handing technical founders—even high schoolers—$10,000 grants. When Levy dropped out a decade ago, the Thiel Fellowship was a radical experiment. Now, as he told Business Insider last spring, "At a big group dinner of 15 or 20 people, we'll look around the table, and no one has a college degree." The community of dropouts is at an all-time high.

Even Y Combinator—the accelerator that quietly reinforced dropout culture since its inception—recently rolled out a program designed for students who want to start companies without dropping out. They can apply while in school, get accepted and funded immediately, and defer participation until after graduation. For YC, known for countercultural moves, this is very on-brand. And the data backs the trend: Y Combinator's cohort median age fell to approximately 24 in 2025, with big increases in founders aged 18-22 during the AI boom, according to Business Insider reporting.

The Economics of Boredom and Obsolescence

Hartz sees a pattern: "You find these really bright kids who are just very bored in school. I see classes of Stanford freshmen or sophomores who fall into this category—they were completely bored, some ended up homeschooling, and just excelled. Even in top universities, they still go and drop out with a thirst to build, to learn, to push the envelope."

But there's a darker economic undercurrent. Kids graduating college face a brutal job market. The calculus is shifting: Why rack up six figures in debt for a degree that might not land you a job when you could build something now? Hartz points to a coming inflection point—projected for 2026 or 2027—when there will be more 1099 contractors than W-2 employees in America. "Thirty years ago, people worked for big corporations like Nestlé or McKinsey or IBM. Now they're working for themselves. They're trading crypto or building their own businesses," he explains. According to GEM's latest data, total early-stage entrepreneurial activity in the U.S. returned to about 19% of people aged 18-64 who are starting or running a new business—the nation is in entrepreneurial hyperdrive.

It's not just ambition driving this. It's necessity. AI and automation are elbowing workers out of traditional roles. "I think it's because people want to start companies, but I also think that, increasingly, people have to start companies as they get elbowed out of their roles owing to efficiencies gleaned through AI and otherwise," Hartz says.

The Dark Side: What Happens When a 15-Year-Old's Startup Implodes?

Here's the uncomfortable question nobody wants to ask at those dropout dinners: What happens when it all goes sideways? Paul Graham once said something that stuck with Hartz—that it's both good and bad for a young founder when their startup takes off, because it takes over their life. You're 15, your company raises millions, and suddenly you're negotiating term sheets instead of going to prom. Your childhood gets compressed into a footnote.

When asked about funding a 15-year-old knowing the company might consume their adolescence, Hartz is candid: "I found it to be an exhilarating experience, but it was punctuated with painful challenges. It accentuates everything." He draws a parallel to the Marines: "That's the age of Marines they send into battle because they're fearless. Maybe there's something about that age where people are very hard-driving."

But here's the reality check: True teenage founders remain uncommon among high-growth firms despite increased visibility in accelerator programs, according to NBER administrative data research. And the average age of successful high-growth startup founders is approximately 42, with top high-growth firms founded by people averaging 45 years old, per MIT Sloan research. The teenage founder phenomenon is high-visibility, but it's not yet the statistical norm for exits and unicorns.

Z Fellows vs. Thiel Fellowship: The New Dropout Playbook

Hartz compares Z Fellows to Peter Thiel's pioneering fellowship: "It's incredibly similar. The difference is the Thiel Fellowship is a nonprofit, and—I'm a big fan of Peter's—but as a nonprofit, you're maybe not out there hustling as hard. Cory's just been out there building Z Fellows over the last few years, and it's a really great program."

Z Fellows offers a small $10,000 check with no strings attached, then selects a few founders for $100K pre-seed investments later. It's lean, fast, and designed for the AI era. Thiel's fellowship, launched over a decade ago, was the original provocation—offering money to drop out was the ultimate irony. Now that irony is orthodoxy. "That phenomenon has been growing and building, and who knows how far it's going to continue, especially with the cost of universities and what a lot of people see as a toxic environment in universities with poor administration," Hartz notes.

The AI Super Cycle: Why Now Is Different

Hartz believes we're at the beginning of a super cycle driven by AI. "We're in very early innings. You have OpenAI and Anthropic growing incredibly fast in the foundational model part of it. Now we're all starting to work on the application layers. You have the coding co-pilots like Cognition, and then you have Decagon and Sierra in the AI CRM space. But there are so many other categories still to be disrupted."

This is the Yankee ingenuity moment for Gen Z. The tools are democratized, the barriers are lower, and the potential upside is astronomical. If you're 15 and you can code, why wait? The market won't.

The Parental Dilemma: Would Hartz Let His Own Kids Drop Out?

Hartz has two daughters—one 17, one 13. His 17-year-old is applying to colleges now. "She does want the college experience. She wants that flavor of life. She never really questioned it. I tried to give her as many chances as I could to consider alternatives, and I'll do the same with our 13-year-old who will be up next."

It's a telling admission. Even the investor betting 20% of his portfolio on teenage founders wants his own kids to have options. College isn't dead—it's just no longer the only path. And for a certain kind of kid—bored, brilliant, and burning to build—the dropout route might be the rational choice.

The Verdict: Exploitation or Evolution?

So is this a gold rush or a moral hazard? Are investors like Hartz visionaries or vultures preying on adolescent ambition? The answer is probably both. The data shows that most founders of higher-growth and VC-backed firms have post-secondary education, with dropouts representing a high-visibility minority rather than the norm, according to systematic founder population studies. The famous dropouts—Jobs, Gates, Zuckerberg—are outliers, not templates.

But the trend is undeniable. Hartz's portfolio shift from 5% to 20% teenage founders in two years isn't noise—it's signal. The question isn't whether this will continue. It's whether the rest of us are ready for a world where the next unicorn founder is too young to rent a car.

In the spirit of Yankee ingenuity, maybe that's exactly the kind of disruption America needs. Or maybe we're about to find out what happens when you hand the keys to the kingdom to kids who just got their learner's permits. Either way, Hartz is all in. And if history is any guide, he's probably early—again.