Kevin Hartz on Airbnb, Holding Winners and the Tradeoffs of Venture Investing

Kevin Hartz believes the largest venture winners can outweigh many losses, and says his instinct is to hold exceptional companies for a long time. He also predicts an enormous AI investment bubble. Both are his investment views, not assurances about future returns or market direction.

Harry Stebbings interviews Hartz, co-founder and general partner of early-stage firm A*, and co-founder of Eventbrite and Xoom. Hartz has invested in several companies discussed, including Airbnb, Pinterest and OpenSea, so his accounts of them come from an interested investor.

Hartz describes a comfortable childhood and says his uncertainty came after university, when he wondered how to make an impact. Being in Silicon Valley during the internet's early growth was fortunate, he says; his drive was to learn and avoid boredom rather than a childhood certainty that he would succeed.

He admires Peter Thiel's ability to see familiar situations through an unusual lens. Of Roelof Botha, he emphasizes calm judgment during crises. Pierre Lamond, he says, set exceptionally high expectations for company leaders and teams.

Hartz recalls Lamond asking him to rank seven direct reports at Xoom and crossing out the last name with a demand to fire that person. Hartz interpreted the incident as a message about excellence. It is an anecdote about an investor's style, not evidence that a lowest-ranked employee is necessarily underperforming.

In assessing founders, Hartz likes learning about their backgrounds and obstacles, though he jokes that his own comfortable upbringing might not have passed his preferred test. He also describes selling things as a teenager and creating a campus photo book funded by local advertising.

Stebbings argues that early entrepreneurship, strong feelings about school and ADHD appear in founders he admires. These are his personal impressions, not a diagnostic test or evidence that ADHD predicts entrepreneurial success.

Both agree that too much early capital can weaken discipline. Hartz says a team may spend $5 million or $10 million to reach milestones it could have reached with $1 million. This is his rule of thumb, not a controlled comparison of financing outcomes.

Stebbings asks whether investor oversight undermines founder trust. Hartz contrasts Sequoia's hands-on support with Founders Fund's greater founder autonomy and says he leans toward the former because experienced people can help avoid mistakes in recruiting, operations and growth.

Stebbings highlights the exceptional skill of an individual founder; Hartz agrees that unusually strong talent can matter, but says raw talent may also be accompanied by weak judgment or immaturity. Founders operate close to the boundary between major success and failure.

Although experience can favor repeat founders, Hartz says he has a soft spot for first-time founders and their willingness to take risks. He describes a preference for youthful creativity and calls himself ageist; this is his personal bias, not evidence that founders of other ages cannot succeed.

Airbnb's seed round did not look obvious to many investors. Hartz recalls the founders' intensity and likens the business to distributed storage for people: instead of a single hotel, rooms are spread across many properties. His analogy reflects his perspective as an investor.

He, Keith Rabois and Jawed Karim made an offer to Airbnb, but Sequoia won the lead. The founders and Sequoia still allowed them to participate with a smaller check. Hartz later joined a Series A led by Reid Hoffman, though he says rapid valuation growth and limited secondary availability restricted his ability to increase the position.

Stebbings asks when to sell, citing companies in which he regrets not taking liquidity. Hartz prefers holding, believing that power-law winners can dwarf losses. Stebbings notes that a venture fund managing other people's money also faces liquidity needs, unlike an individual angel investor.

Hartz moved from angel investing to venture partly for a new challenge. He likes the idea that investors are judged by their next decision rather than their past successes. A* had begun deploying its second $300 million fund and managed about $600 million in total at the time of the interview.

He describes a barbell strategy: primarily pre-seed and seed, with some new Series B investments, rather than the Series C implied elsewhere in the episode description. He says the allocation is roughly 70/30, targets double-digit ownership where possible and has exceptions for exceptional founders.

On market sizing, Hartz thinks mechanical total-addressable-market analysis can be overdone. He looks qualitatively at teams and their ability to move from a smaller initial market into a larger one, while recognizing that this is an investment judgment.

Stebbings argues that seed investing has become crowded and expensive. Hartz jokes that everyone should stop investing at seed, then acknowledges that the old expectation of owning 30% is less common. A* generally seeks to lead or co-lead for its fund, although he may make smaller personal investments.

He says competition among funds feels sharper and cooperation often needs a specific rationale. The stakes are high because the largest outcomes have become so large. Those comments describe his experience of the market rather than a measure of cooperation across all firms.

Asked whether operators make more empathetic investors, Hartz resists making operational experience a prerequisite. He points to successful investors who came from journalism, banking or venture itself, arguing that more than one career path can produce good judgment.

A* also makes new Series B investments, not only follow-ons, with typical checks of $10 million to $20 million, he says. He cites Warp as one example and views periods when other investors call a stage dead as worth investigating. His assessment reflects the firm's own investment interests.

Stebbings asks whether moving from angel investing to a fund changed the type of outcome Hartz seeks. Hartz says he has long aimed for unusually large outcomes, not merely businesses that return a fund. He notes that markets can become much larger than expected, citing remittances and Xoom.

He distinguishes earning the right to work with a founder from using aggressive sales tactics to win a signature. Relationships help source opportunities, but he finds selection humbling because missed investments can remain more memorable than decisions made.

Hartz recalls dismissing YouTube when he was burned out after stepping down at Xoom. He says the lesson is to remain open and listen even on a bad day: a seemingly casual encounter can contain an important opportunity.

When declining an investment, he finds detailed feedback difficult and often keeps it brief. He suggests constructive ideas can be useful, but a long back-and-forth consumes time. Stebbings questions whether telling a founder that an investor lacks belief is necessarily helpful.

Hartz reveals that he and fellow investors gave Airbnb an exploding term sheet. Paul Graham criticized the practice privately and wrote about it publicly without naming them. Crucially, Hartz says they still participated in the seed round; the episode title should not be read as saying he lost all access to Airbnb.

Stebbings notes that investors may fear founders shopping an offer for a higher price. Hartz acknowledges bad behavior can occur on both sides, but says founders should have a fair chance to assess the market and potential partners. If an investor still wants the deal after an artificial deadline, he questions what the deadline accomplishes.

Some investments show promise immediately; others need years of persistence before finding their way. Hartz stresses patience alongside founder urgency and says investors should not assume a slow start determines the outcome.

Asked about major value drivers, he names Airbnb, Pinterest, Bitcoin and Uber. He also recalls PayPal as an early investment and tentatively estimates a roughly 20-fold return, adding that he would need to check. The discussion does not establish audited returns for these positions.

Asked for his biggest zero, he instead describes TokBox, an early video company he seeded with Rabois and in which Sequoia led the Series A. It encountered scaling and product-market-fit difficulties. He recalls an acquisition for roughly $70 million and an approximately 2x return, so the example was not literally a zero in his telling.

The conversation turns to whether old consumer hits could be revived with stronger execution. Stebbings and Hartz speculate playfully about an incubator and past products; their exchange is a discussion of ideas, not an announcement that an investment or company was formed.

Hartz says market timing requires looking several years ahead instead of copying what works today. He generally spends the most time on growing companies because they create many opportunities and needs, while saying he retains sympathy for founders whose businesses are struggling.

He cites OpenSea, which he backed at seed and which reached a $13.5 billion valuation in the 2021–22 boom, as an unresolved outcome. A valuation is not cash returned. He recalls having a secondary opportunity and choosing not to sell because he expected rapid transaction growth to continue.

Stebbings argues that selling part of a seed position could lock in a large gain while retaining upside. Hartz says the choice depends on objectives and prefers letting potential compounders run. Their disagreement illustrates the tradeoff between realized liquidity and possible future appreciation, not a demonstrated return.

Hartz wishes he had taken more risk by joining PayPal rather than merely investing. He also recalls declining an early opportunity to work on Palantir because of privacy concerns about the proposed use of data, a decision he later regretted professionally.

Stebbings criticizes investment-committee voting structures that reward ambiguous positions. Hartz admires Founders Fund's willingness to let a partner's strong conviction drive a deal, and recalls concentrated bets as expressions of a power-law strategy. Concentration can amplify losses as well as gains.

He recalls Botha's advice to be supportive when companies are in crisis and more challenging when they are doing well. Stebbings disagrees with applying one response universally: some founders need reassurance, others a direct push. Hartz emphasizes the value of a calm, productive voice during severe stress.

Hartz discusses his daughter's serious eating disorder and the strain on their family; Stebbings shares his own experience with bulimia and family addiction. Their accounts describe personal experiences, not medical guidance or a complete assessment of available treatments.

Hartz expresses frustration with treatment and hopes for more research, mentioning brain stimulation as a possible area to investigate. The interview does not establish that such approaches treat eating disorders or addiction effectively; his remarks are hopes and questions, not evidence of efficacy.

They discuss the difficulty of building mental-health businesses and the need for better therapies for neurological and psychiatric conditions. Hartz calls for more attention and research, without presenting clinical evidence for a particular intervention.

In quick-fire answers, Hartz says the rapid growth of defense technology surprised him. He names Palantir and Anduril, companies in which he has investment interests, and presents his assessment of US preparedness as a personal view.

For new angel investors, he recommends setting aside money one can afford to lose and learning through repeated investments. Stebbings adds his own preference for equal-sized checks. Neither presents the advice as a guarantee of success.

Hartz admires Y Combinator's ability to continue producing notable companies over many batches. He also sees plentiful capital and emerging platforms as opportunities for founders, while believing markets are entering a speculative AI bubble.

He predicts venture returns will improve relative to the 2021–22 period, while acknowledging that he too made mistakes then. This is a forward-looking opinion, not a performance result. He closes by suggesting more honest conversations about mental health.