Backed by the founders of Tesla, SoFi, MuleSoft, and Twitch, Contrary Capital aims to invest in the brightest university entrepreneurs at the top schools in the US.
College students get a bad rap as avacado-loving, bodega-replacing, self-serving millenials, but there is one thing that can’t be denied: they know how to create tech companies.
If you scan the recent past of successful tech companies in America, many were founded by college students: Google, Facebook, Dropbox, Reddit, Yahoo, Snap, and many, many more. In Utah, two of our most well-known companies — Omniture and Qualtrics — were started by students.
Eric Tarczynski, founder of Contrary Capital, is well-versed on the success of college-aged founders. Three years ago while attending Northeastern, he began noticing the amount of entrepreneur-focused activity happening on college campuses.
“Over the past six or seven years, there has been this explosion of entrepreneurship at universities across the US,” said Tarczynski. “Not only the culture of entrepreneurship, but the caliber and number of companies being started.”
After graduation, Tarczynski began mulling the idea of a university-focused venture fund. He reasoned that many of our country’s great tech companies had come straight from college and that no venture group was casting a wide-enough net to capture these companies.
Just like that, Contrary Capital was born.
“I believed that someone was going to win this space, someone was going to build the dominant university-focused brand in venture capital, try and capture all the innovation that’s ongoing at the top schools across the US,” said Tarczynski. “Why not us? That’s the story of Contrary Capital.”
Today’s launch of Contrary Capital has been two years in the making. Tarczynski chose the top 55 major research universities in America (a list that includes Utah and BYU) and began building out the infrastructure to support Contrary in each college town. This started with building a network of college students tuned into the world of entrepreneurship.
“We mapped out each university’s entrepreneurial ecosystem,” said Tarczynski. “All of the key stakeholders, from key administrators to faculty members to student groups to student leaders within those groups. We would isolate that and come up with a group of about 20 or so that we thought were the more connected and driven students in each of these ecosystems. We found early on that if we had done our job of plugging into these students, we would basically start to triangulate and get a good understanding of who the leaders were at each of these school’s programs. And then we would target those individuals.”
After choosing the right students at each college campus, each is subjected to a training curriculum on both venture capital and the process of investing through Contrary.
The investing process revolves around a decentralized model — prospective companies are sourced by students, invited to present at a partnership meeting, and then meet with Eric or another member of the Contrary Capital team to make the final decision. The investments will be in smaller chunks ($50K, $100K, $200K), treated as a meritocracy: wherever the best deals are, that’s where the money will go.
“This decentralized model is a student-driven model,” said Tarczynski. “We’ve brought on hundreds of students that we think are the most connected and driven in each of these school’s entrepreneurial ecosystems. Their role as investors is to basically be a boots-on-the-ground VC: going around and grabbing coffee with entrepreneurial peers or professors; attending or hosting events; going to hackathons; speaking at clubs or on panels. Literally anything a venture capitalist would be doing, they’ll be doing.”
Tarczynski started fundraising one year ago and in that time, has built out an impressive list of partners that includes Tesla co-founder Martin Eberhard, SoFi co-founder Dan Macklin, MuleSoft founder Ross Mason, and Twitch co-founder Emmett Shear. According to Tarczynski, “80% of our LPs have started billion dollar tech companies over the past decade.”
In addition, Contrary Capital has already closed two deals with student entrepreneurs — one with BYU student and Cortex Health founder Riley Adamson, a man I once shared an office with and also wrote about on this website. Small world.
Now we turn our eyes to the future. Infrastructure is in place, investment dollars in place, all that’s left is Tarczynski and Contrary Capital executing on their vision of a venture capital powerhouse, university-style.
“We’re a decentralized, university-focused venture fund,” said Tarczynski. “We’re investing in the brightest university entrepreneurs — students, faculty, recent grads — at the top schools in the US. The most successful tech companies of the past 20 years were started at universities across the US. The next generation’s will continue to emerge from universities — only this time, more than ever before.”