Earlier this year, we witnessed one of the largest tech IPO’s since Facebook back in May 2012. Snap and Facebook have swiftly become tech-media giants, collectively reaching billions of people, and generating billions of dollars in revenue. What else do both of these companies have in common? Through a series of events that will likely lead them to become two of the fiercest competitors in the mobile advertising market, the most fascinating aspect is these two companies were started by undergraduate college students. Let that sink in. The two largest tech IPO’s that the market has seen in the past five years, came from dorm room ideas. These instances are redefining venture funding today.
Historically, most major VC funds would tell you that it’s most important to have the “right team” or “invest in the founders, not the technology,” to see substantial or expected returns on their investment. Though this might still be the case, it brings up an important question: was that the circumstance in consideration when Peter Thiel invested $500,000 in 19 year-old Mark Zuckerberg or when Lightspeed gave 21 year-old Evan Spiegal $485,000? Both instances were sizable investments that didn’t follow the traditional “founder’s first” idea. Though both Zuckerberg and Spiegal were exceptionally ambitious and extremely strong academically, both young men lacked even a fraction of the experience that most venture funds look for in founders.
What these two examples demonstrate is that there is a goldmine to be tapped, and it’s not in “experienced founders,” but in freethinking students. Over the last few years there has been a strong shift on university campuses in supporting their student startups and helping them turn into viable companies. Unfortunately, what has lacked in this process is that the university itself can’t provide the much-needed capital. These student-run startup companies need to get to the point where they can formally raise their seed rounds. Many of the top VC funds have smaller funds dedicated to university startups, but these are typically for seed-round investments. Though very helpful, these large funds often can’t commit resources necessary in helping these young entrepreneurs succeed, because they tend to prioritize larger investments in companies that are further along in their life cycle.
This complex and troubling issue led to the founding of Contrary Capital. This decentralized university-specific venture fund is focused on providing pre-seed capital to enable entrepreneurs through what is arguably the toughest phase of the startup cycle. At Contrary, we are a team of 110 student-partners representing 55 of the top universities across the nation. We are dedicated to finding the most beguiling and compelling ideas and projects across thousands of campuses and helping them become the “unicorns” and industry leaders of tomorrow. We focus on the pre-seed rounds to help these startups prove viable and grow to the point where they are ready to raise a formal seed round. We are able to offer nearly every resource a young entrepreneur would need in order to be successful, using the strong network we have at our disposal across the country. This network includes not only some of the most accomplished students at the nation’s top universities, but also strong relationships with the majority of the top funds across the country and with the universities themselves.
Our community is our biggest and most valuable strength, and we pride ourselves in keeping everyone in our community up to date through weekly newsletters, personal 1:1’s with university leaders, representatives of large funds, and available mentors/advisors. We provide these services to assist the student startups with the necessary resources when they encounter obstacles or other unforeseen issues. Contrary’s core values are simple: We are genuine, we are empowering, and we can have an impact. We will be transparent with the companies we work with, because we are steadfastly committed to guiding and supporting young entrepreneurs within our communities. By doing so, these communities not only benefit economically and socially, but this also helps sustain a strong economic environment for future generations. Learn more at contrarycap.com.