It’s the golden age of AI, and there’s a new gospel in Silicon Valley: Building a startup isn’t just for the chosen few. It’s the new rite of passage into adulthood.

Young founders have long been icons. Bill Gates, Steve Jobs, Mark Zuckerberg, and others all bailed on school in their teens and 20s to build their tech empires, inspiring Gen Z founders to do the same.

But fueled by AI hype, the ease of vibe coding, and a sense that the clock is ticking, a handful of teens and twentysomethings are building startups instead of taking the well-trodden path of a college education or a Big Tech job.

“In all of human history, young people have been ambitious and wanting to make something of themselves in their early 20s,” Roy Lee, 21, told Business Insider. Lee was famously kicked out of Columbia and then cofounded Cluely, an AI assistant to help users “cheat on everything.” The startup raised $15 million in a Series A funding round led by Andreessen Horowitz, or A16z, in June.

“I consider this the same as people who would sail the ocean with a 20% chance of survival for the chance of glory and changing the world meaningfully,” Lee added.

Venture capitalists at A16z declared right now “the best time in a decade for dropouts and recent graduates to start a company.”

Inexperience meets AI

In 2022, 10% of startup founders in the mentorship program Y Combinator were in their early 20s. Two years later, 30% of Y Combinator’s founders were college students or recent graduates, according to an X post from a partner at the firm.

When Marvin von Hagen, 25, who cofounded AI agent startup the Interaction Company of California, joined startup mentorship programs, he thought he was the oldest person in the room. Though von Hagen graduated from university in Germany, he wonders if the ease of learning with AI has cheapened college degrees: “The barrier to doing something has gotten lower and lower,” Hagen said. “You can learn about any topic in the world much more quickly because you can ask these language models to teach them to you.”

Before AI posed a threat to early-career tech jobs, the post-pandemic tech downturn of 2022, which saw a spate of tech layoffs that has continued on a rolling basis, put young people off the idea of finding stability in conventional career paths in tech.

“It is pretty clear to me that if you want a stable future, the worst thing you can do is go work at a Big Tech company that’s laying off people by the masses,” Lee said. “What I’m doing is probably the least risky thing that anybody could ever do. When the tectonic plates of society are shifting, that’s the time to take a big risk.”

I think college is dead.Rahul Sonwalkar, 28

Jake Adler, 21, whose startup Pilgrim is developing a suite of biotech products, including a wound-healing solution, said that AI tools like ChatGPT helped him learn about graduate school-level topics like high-energy physics. While young founders have existed for decades, Adler thinks advancements in AI have encouraged more teens and twentysomethings to build complicated hardware as opposed to crypto or social media startups.

Adler graduated from high school in 2022 and isn’t planning on attending college.

“You have a Ph.D. in your pocket,” he said.

Betting on young people

Y Combinator and other programs like it have long fueled the Valley’s next crop of talent with cash and cachet. At Dorm Room Fund, which spun out of First Round Capital in 2012, college students invest in startups founded by people their age. The Thiel Fellowship, which launched in 2011, awards $200,000 to “young people who want to build new things instead of sitting in a classroom,” its website says. And Z Fellows gives early-stage founders $10,000 and a week of mentorship.

Its founder, Cory Levy, hosted a graduation earlier this summer for entrepeneurs who never finished school. Founders eventually move on from these programs and start raising cash from more traditional venture capitalists.

These mentorship initiatives, which have produced companies like Figma and AirBnB, have slowly reduced skepticism in backing those who haven’t yet started their careers. Despite teens and twentysomethings’ lack of work experience, many investors seem unfazed by their ages.

Thomas Laffont, a cofounder of investment firm Coatue Management, doesn’t think about age and instead looks for lean teams. “What if size actually has reverse scale effects?” Laffont told Business Insider. “The bigger you are, the harder it is to adopt new technologies.”

Lee, the Cluely cofounder, said venture capitalists didn’t ask how young he was while he was fundraising. Lee also doesn’t consider the age of his early employees to be a factor in his recruitment process, instead focusing on culture fit, though most of Cluely’s employees on LinkedIn are college-aged. At the startup’s office in late June, red Solo cups were strewn around, nestled between desks.

Michael Gibson and Danielle Strachman, two investors who built the Thiel Fellowship, have long bet on young founders. The duo cofounded venture firm 1517 in 2015 to back those “particularly skeptical of institutions,” Strachman said. About 85% of their portfolio is young, non-degreed founders, Gibson said, adding that “universities are failing” and that AI tools have only “accelerated the autodidacts.”

Gibson received a bachelor’s degree from New York University, a master’s from the University of Chicago, and also studied Philosophy at the University of Oxford, according to his LinkedIn. Strachman graduated from Simmons College.

To Gibson and the founders his firm speaks with, traditional postgrad jobs “aren’t as exciting as they used to be,” he said. “Management consulting, investment banking — it just seems so normy now.”

‘Disillusioned’ with college

Young founders inevitably face a tough trade off: their company or their education. Some who attended college a few years ago have a blunt assessment: “I think college is dead,” Rahul Sonwalkar, 28, said. Sonwalkar is the founder and CEO of Julius AI and graduated from the University of Texas at Dallas in 2019 — a year early because he “couldn’t wait to come to San Francisco.”

On average, graduating from college improves earning potential. The percent difference in earnings between college and high school graduates, known as the college wage premium, has floated roughly between 70% to 80% over the last decade, according to the Federal Reserve Bank of San Francisco. As economist David Deming previously told Business Insider, the return on an investment in college — both the time taken to attend and the price of tuition — is greater than the annual returns of investing in the stock market, buying a home, and starting a business.

Plus, founding a company doesn’t always lead to high earnings. Over two-thirds of startups never turn a profit, Harvard Business Review reported in 2021.

Sonwalkar said that the social experience of college is an upside of attending. Investor and YCombinator cofounder Paul Graham seemed to echo this.

“Don’t drop out of college to start or work for a startup,” Graham wrote on X in July. “There will be other (and probably better) startup opportunities, but you can’t get your college years back.”

To Graham and other outspoken founders and investors, college isn’t about readying oneself for professional success: “It’s to improve your mind,” Graham replied to his initial X post.

The replies were full of clapbacks. Khosla Ventures managing director Keith Rabois had some thoughts: “Every Thiel Fellow would probably disagree.”