Backing PayPal: investing all proceeds

Kevin Hartz, Co-founder of A*, Eventbrite, Xoom, and Sauron.

Kevin has been building and investing in technology companies for 30 years, and we talk about how the industry’s evolved, why he calls AI the Mother of All Bubbles, why we’re still early, and lessons today’s breakout AI companies can learn from those that survived the Dot Com Crash.

Kevin is a big proponent of backing young founders. A significant percentage of his latest fund at A* is invested in teenagers, and he shares how he identifies outlier talent so early, from Seed investments in Airbnb, PayPal, and Pinterest, to many of today’s hottest AI companies.

He also shares the insane story of investing 100% of the proceeds from his first startup into PayPal’s Seed round, how PayPal’s early fraud systems inspired Palantir, what he learned from the PayPal Mafia, from Peter Thiel, and what makes Founders Fund special.

We also talk about how he and his wife recently had two babies, five months apart, using genome screening and surrogates.

Thanks to Ramtin Naimi, Navya Gudimetla, and Bennett Siegel for helping brainstorm topics for the conversation.

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Timestamps:

(4:25) Power shift from VC’s to founders since the 90’s

(9:08) AI is the mother of all bubbles

(12:40) Why AI is still underhyped

(14:10) What Kevin and A* are investing in today

(16:02) Investing 100% of his first startups proceeds in PayPal’s Seed round

(21:21) What made the PayPal Mafia special

(23:37) Parallels between the 90’s and today

(26:40) What makes Founders Fund special

(35:07) How Palantir evolved from PayPal’s fraud models

(39:06) Building Xoom on the PayPal API

(43:38) Lessons between Kevin’s 1st and 2nd startups

(46:52) Starting Eventbrite off early PayPal API app

(51:51) Eventbrite’s hidden TAM challenge

(53:49) Selling Eventbrite to Bending Spoons

(54:59) Investing 20% of A* in teenage founders

(1:02:33) Incubating Sauron, the home security company

(1:08:44) Making breakfast for our kids

(1:13:33) Having kids with genome screening and surrogates

(1:20:31) Collecting art, how to get started

Referenced

https://www.a-star.co/

https://www.eventbrite.com/

https://www.xoom.com/

https://www.sauron.systems/

https://www.orchidhealth.com/

Setting the Table by Danny Meyer: https://www.amazon.com/Setting-Table-Transforming-Hospitality-Business/dp/0060742763

20% of fund in teenage founders: https://techcrunch.com/2025/10/18/this-top-vc-bet-close-to-20-of-his-fund-on-teenagers-heres-why/

https://nypost.com/2025/12/14/us-news/xu-bo-chinese-billionaire-reportedly-sires-more-than-100-kids/

Follow Kevin

Twitter: https://x.com/kevinhartz

LinkedIn: https://www.linkedin.com/in/hartz

Follow Turner

Twitter: https://twitter.com/TurnerNovak

LinkedIn: https://www.linkedin.com/in/turnernovak

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