Venture Capital

Part fund, part accelerator, Contrary Capital invests in student entrepreneurs

First circular Capital has both the Dorm Room Fund and the Graduate Fund. General Catalyst has Rough Draft Ventures. And Prototype Capital and a few other micro-funds focus on investing in student founders, but overall, there’s a shortage of capital set aside for entrepreneurs still making their route through school.

Contrary Capital, a soon-to-be San Francisco-based operation led by Eric Tarczynski, is raising $35 million to invest between $50,000 and $200,000 in students and recent college dropouts. The compact, which operates a summer accelerator app for its portfolio companies, closed on $2.2 million for its debut, proof-of-concept fund in 2018.

“We really care about the founders construction an impressive company who don’t have the proverbial rich uncle,” Tarczynski, a former founder and startup employee, told TechCrunch. “We thought, ‘What if there was a fund that could democratize access to both world-class capital and mentorship, and really increase the probability of victory for luminous university-based founders wherever they are?’ “

Contrary launched in 2016 with backing from Tesla co-founder Martin Eberhard, Reddit co-founder Steve Huffman, SoFi co-founder Dan Macklin, Twitch co-founder Emmett Shear, founding Facebook engineer Jeff Rothschild and MuleSoft founder Ross Mason. The compact has more than 100 “escapade partners,” or entrepreneurial students at dozens of college campuses that assist fill Contrary’s pipeline of deals.

Contrary Capital celebrating its Demo Day event last year

Last year, Contrary kicked off its summer accelerator, tapping 10 university-started companies to finish a Y Combinator -style app that culminates with a little, GP-only demo day. Admittedly, the roughly $100,000 investment Contrary deploys to its companies wouldn’t get your average Silicon Valley startup very far, but for students based in college towns across the U.S., it’s a game-changing deal.

“It gives you a tremendous amount of time to figure things out,” Tarczynski said, noting his own experience construction a company while still in school. “We are trying to push them. This is the first time in many cases that these people are working on their companies full-time. This is the first time they are going all in.”

Contrary invests a good amount of its capital in Berkeley, Stanford, Harvard and MIT students, but has made a concerted effort to provide capital to students at underrepresented universities, too. To date, the group has completed three investments in teams out of Stanford, two out of MIT, two out of University of California San Diego and one each at Berekely, BYU, University of Texas-Austin, University of Pennsylvania, Columbia University and University of California Santa Cruz.

“We wanted to have more come from the 40 to 50 schools across the U.S. that have comparable if not acceptable tech curriculums but are underserviced,” Tarczynski explained. “The only difference between Stanford and these others universities is just the volume. The caliber is just as high.”

Contrary’s portfolio includes Memora Health, the provider of productivity app for clinics; Arc, which is construction metal 3D-printing technologies to dispatch missile engines; and Deal motor, a platform for facilitating corporate voyage.

“We are one giant talent scout with all these non-identical nodes across the country,” Tarczynski added. “I’ve spent every waking time of my life the last eight years living and breathing university entrepreneurship … it’s beautiful clear to me who is an exceptional university-based founder and who is just caught up in the hype.”

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TechCrunch
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