Kevin Hartz | Backing Teen Founders, Lessons from the PayPal Mafia

Welcome to The Peel—I’m Turner Novak. Today I’m joined by Kevin Hartz, co‑founder of A* Capital, Eventbrite, Zoom, and Sauron; we get into three decades of building and backing, why he sees AI as a supercycle, lessons from the dot‑com era, and his playbook for spotting outlier talent. Quick note: because of ongoing transaction rules, we cut most Eventbrite specifics, but we kept the spirit of the story; Kevin, welcome.

Great to be here, Turner.

You’ve watched tech and venture transform; what’s actually changed versus what still feels the same?

The mechanics are similar, but the industry exploded from a cottage scene to a global ecosystem, and power shifted from investors to founders as capital sources multiplied and terms standardized.

Are we in an AI bubble, and if so, how early are we?

Yes, it’s the mother of all bubbles, but we’re still early: chips and data centers are laying rails, model platforms are maturing, and the real wave is the application layer, where early standouts in coding and customer support hint at how much is still to be built.

How do you decide what to fund now at A* without getting swept up?

We’re a pre‑seed and seed firm, so we underwrite people; at that stage, exceptional founders are the edge, like the Decagon team in AI customer service—pace, clarity, and recruiting gravity matter most.

You’ve repeatedly picked winners absurdly early; what’s the pattern you look for?

I once put all my first exit proceeds into PayPal’s seed because the team’s ingenuity was unmistakable, and even when the dot‑com crash made them look doomed, the product and execution were on a different level.

Crowded AI categories can look like everything works; what parallels do you see to past cycles?

History rhymes: infra is cheaper and markets are bigger, but categories tend to go winner‑take‑most; think search—being number one is everything, and co‑pilot markets will likely mirror that.

Do you explicitly screen for category leadership potential?

Always; late entrants can still sweep the field, so we ask whether this team can become the default, not just a participant.

Beyond team quality, what else signals a future leader?

We look for an end‑of‑one angle—ideas that feel odd at first but compound fast; Founders Fund excelled at those, and my miss on Lyft versus Uber taught me to respect market size and capital models.

What was Founders Fund like from the inside back then?

Counterculture and conviction‑led: little ceremony, escalating partner buy‑in with check size, and a relentless bar for personal conviction that could override committee comfort.

Anduril started in that orbit, which was contrarian at the time; same with Palantir’s path to big government contracts.

Both fused contrarian ethos with patient execution; Palantir in particular ground it out for years and then surged as AI tailwinds arrived, building on graph‑style fraud insights born at PayPal.

You also built Zoom off PayPal’s platform; how did that come together?

We persuaded PayPal to open an API to diversify away from eBay, became the first developers, and launched an online remittance product in a harsh downturn—great companies often start in headwinds.

How did Eventbrite emerge from there?

A small ticketing tool we built kept growing unattended, so we leaned in with a tight US‑Europe product loop and a lean PLG mindset; it became “ticketing for the rest of us” with low fees only when sales happen, which helped creators market and monetize events.

Sizing that market was fuzzy; how did you think about it?

Unlike remittances with clear stats, this was an early creator SMB segment that’s since blossomed into a massive services economy.

What can you share on the Eventbrite transaction?

We announced a deal to be acquired by Bending Spoons and will share details after close due to regulatory limits.

Why the focus on backing teenage founders?

We didn’t chase it; the pipeline got younger via programs like Z Fellows, and some teens already run real businesses, though you match them to fronts where fresh intuition and fearlessness are advantages, not heavyweight enterprise software.

What else are you backing at A* right now?

We’re generalists across AI apps, creator tools like Warp, industrial biotech replacing petrochemicals with sugars, and defense drones, chosen for timing and exceptional founders.

You’ve also incubated a few; what are they?

A handful: an AI mortgage startup, an AI tax service called 15th, and Sauron, which rethinks home security.

Why is home security interesting now?

Incumbents have stagnated and avoid privacy‑sensitive tech, while self‑driving slashed sensor costs and advanced perception, so we’re porting that stack into the home with trained humans in the loop to cut false alarms and act in real time, then expanding into helpful home memory.

On your family front, you had two babies five months apart via IVF, surrogates, and genomic screening; how does that work in practice?

You create and freeze embryos, work with a surrogate, and use full‑genome embryo reports to lower the risk of serious disease—not to design traits—and I expect more families to bank embryos as costs fall and guardrails mature.

Navya says you’re deep into art; what are you collecting and why?

With guidance from Michael Ovitz and a friendly rivalry with Ramteen Naimi, I’m drawn to mid‑80s Yale painters like John Currin and Lisa Yuskavage; a piece needs to stir me and make investment sense, or it doesn’t make the wall.

I’m drawn to artists the way I’m drawn to rare founders—they create work that lasts and compounds in value. After a tough five-year stretch when art was out of favor, the new cycle is kicking in and recent quarters have brought eye-popping auction results.

How do you actually start collecting—do you need a broker or can you just reach out?

The smoothest entry is the big fairs—Basel in Switzerland and the Miami version—where you see top galleries, meet people, and start relationships. Connect with major galleries like the Gosian, work with a rep who flags pieces—John Kern is one example—and keep an eye on Christie's and Phillips; friends there can help you read the market.

I’m probably not ready to buy seriously yet—I need some venture liquidity first.

You can still begin with local artists or recent art-school grads and build from there.

That’s like seeding: a hundred-dollar bet now instead of ten thousand later. This was a blast—where can people follow you?

Twitter and LinkedIn work great—DM me anytime—and thanks, Turner, this was a joy.

Big thanks to Numeral and Flax for supporting the show. If you missed last week with Jason Calcanas on the Olin podcast and lessons from Elon, Oprah, and Travis Kalanick, go listen, and come back next week for remote.com cofounder Marcelo Lebray on building one of Europe’s biggest companies. Like, comment, subscribe, maybe even name your next kid after me, and grab my newsletter The Split in the description to get episodes and transcripts by email every week—thanks for listening, see you next time.