The coronavirus pandemic has made returning to the classroom less appealing to many students. Contrary Capital founder Eric Tarczynski sees that as an opportunity.
"Perhaps obviously, paying $50,000 to take classes online is just not appealing to anyone," Tarczynski said. Students headed to elite schools such as Harvard seem particularly troubled by the situation. Instead, Tarczynski's venture firm is making a different offer: It will invest up to $100,000 in exchange for a small slice of ownership in startups created by five different students (or student teams) who are willing to take a gap year to build a company.
The idea of a gap year isn't new. Neither is the idea of investors paying kids to drop out of college: Peter Thiel has been doing it for years. But Contrary's experiment is a bet on the pandemic being a good time for students to start companies — and on there being more of an interest in leaving college, on a temporary basis, to do it.
It's an interesting move for a firm like Contrary, which has been traditionally cozy with colleges. Part accelerator, part venture firm, Contrary's business has been to scout college campuses for the next generation of entrepreneurs and give them support and access to Silicon Valley funding networks. Now, the gap year experiment is encouraging founders to take a year away from school.
"We do believe pretty deeply in universities, but primarily when they are in person," Tarczynski said.
It's also a different approach than the Thiel Fellowship, which offers the money as a grant and pays students to drop out of college entirely to pursue their company. But the precedent the Thiel fellowship has set is an inspiring one to Tarczynski. Billion-dollar startups like Oyo Rooms and Figma were born out of Thiel Fellowships, and Ethereum's co-creator, Vitalik Buterin, was also a Fellow.
For Contrary's program, groups have to commit to working on the project full time, but otherwise the firm is open to backing entrepreneurs at any education stage, from undergraduates to doctorates. Contrary is also open to backing immigrant founders, especially since some international students may be sent home if schools don't have in-person classes. The hope is to help college students looking for an alternative path during the time of coronavirus to be able to focus on a company without the distractions of school for a year.
"We pretty strongly believed that the limiting factor for young people when it comes to company creation is just bandwidth," Tarczynski said.
Paying founders to take a year off is an easy way to clear their plates.