A new university-focused venture capital firm launched Monday with plans to invest in Triangle startups.
Founded by 25-year-old Eric Tarczynski, Contrary Capital works with a team of more than 100 students investors at campuses including Duke University to identify promising student entrepreneurs. The firm has representatives at more than 40 colleges across the U.S. and plans to invest between $50,000 and $200,000 in student businesses. Its advisory board includes Martin Eberhard, co-founder and former CEO of Tesla Motors; Ann Winblad, co-founder and managing director of Hummer Winblad Venture Partners; and Daniel Macklin, co-found of SoFi.
“Our founder thought this was niche space that a lot of big name venture firms haven’t exposed,” said Tracy Han, an MD/MBA candidate at Duke who is one of the student partners. “It’s a space not a lot of people have gone after.”
Han said that student partners at the universities work on building relationships to spot promising talent in the college ecosystem, including faculty and recent graduates.
There are currently four student partners at Duke – Han and undergraduates Austin Wu, Steven Yang and Yixin Lin. Han noted that most universities have two or three students partners.
Han aims to identify startups in the Fuqua School of Business and the Duke Medical School. She has worked to form connections with faculty who have industry relations and met with founders from the Duke Startup Challenge.
“I met Eric about two summers ago while interning in San Francisco,” she said. “He felt like I could help with the medical side and could help source deals from the graduate schools.”
Yang focuses on startups in the undergraduate realm, which he is well-suited to do as one of the co-directors of HackDuke, a technology competition in which participants have 24 hours to create hardware and software projects. He also works with the Duke Startup Challenge and the Duke Innovation and Entrepreneurship Initiative.
“We’re really involved in all things entrepreneurship on campus,” Yang said. “We see a lot of students who have project ideas and are building their own ventures.”
He explained that Contrary is university-focused because so many startups begin in college dorms. They want to identify these businesses at the early stage and provide the resources to give them a boost.
When a student find a startup they think is a good fit for Contrary, they have the business fill out a set of standard questions which are shared with the other student partners across the country. Then, they broadcast a live stream with the startup founders and partners so all can ask questions. Ultimately, Tarczynski makes the final decision on whether to invest or not, taking into account the opinions of the student partners and the advisory board.
Contrary Capital has invested in two startups this year, which Han said she thinks is promising considering they hadn’t even publicly launched yet. Additive Rocket Corporation from University of California at San Diego is developing new methods for manufacturing rocket engines, and Cortex Health from Brigham Young University features a service that manages follow-up calls to patients when they return home from the hospital. Tarczynski has said that Contrary plans to make 15 to 25 deals per school year.
One startup from Duke was considered this year, but the partners ultimately decided not to fund it, Han said.
Yang explained that Contrary places a strong emphasis on mentoring the firms they invest in. They plan to bring these startups’ founders together in a summer accelerator program to form an entrepreneurial community.
“We’re not just giving them money and letting them go,” he said. “If they succeed, we succeed.”
Despite the high risk of investing in student startups, Han said she is confident Contrary Capital will be successful because it has a larger breadth than other venture capital firms, as it’s located at universities across the country. The high caliber of the student partners and the companies it sources also contributes.
“If you have good student partners to identify startups, that mitigates some risk,” she said. “Eric has done a good job of picking student partners. Now it’s our job to pick people who are very interested in learning and continuing on and grinding away.”