Microsoft officially announced its Bing Fund, an angel investor and business incubator that will offer promising startups cash, advice and privileged access to Microsoft’s technology. The fund will make $50,000 to $100,000 investments in early startups through standard convertible notes that can be switched to equity at Microsoft’s discretion.
The fund essentially seeks “like-minded entrepreneurs—great talent that is innovating online to solve big problems and create amazing new experiences,” Microsoft explained in a blog announcing the fund.
“We believe that combining the creativity and fresh insights of startups with Microsoft’s expertise and tremendous reach creates a unique formula for driving the industry forward,” the company added.
The fund is the brainchild of Rahul Sood, the founder of VooDoo PC, a boutique maker of high end gaming computers that was acquired by HP.
In addition to the cash, startups also receive eight months of advisory development assistance, subsidized access to Microsoft Research technology and unique API’s from Bing’s data ecosystem. Startups are also offered office space in the “Bingcubator” at Microsoft’s Bellevue, Wash. Campus. The office area will have its own key card access and be separated from the rest of the Microsoft campus to better cultivate an independent culture. Participants will have daily contact with the Bing Fund team as well as Sood.
“We will scout early stage startups with talented teams who are working on disruptive online innovations that we feel are compelling and solve big problems,” Sood explained in his blog. “Raising money is easy—the amount of time and energy we’re going to dedicate to each startup in our program is worth more than any dollar amount we could throw at them, which is why we’re choosing to incubate fewer than a dozen startups at a time.”
Microsoft suggests that applicants already have a working prototype, a broad marketing strategy, and good idea of the market for their product. Startups will be accepted continually, with existing accelerators asked to contribute suggestions for potential candidates for the fund. Though it will start with only a few at a time, new startups will be accepted as older ones graduate, creating a perpetual rotation. The incubation period is at least four months.
Despite being named after Microsoft’s search engine, the Bing Fund does not require applicants to use Bing’s search engine or any Microsoft protocol, though it may help. The FAQ for the fund states that it would love to see products built on Microsoft’s Windows Azure cloud platform, though the fund does not require it.
Whatever technology results from the incubation remains with the startup, though “acquisition remains a possibility,” Microsoft stated in the release.
With this latest incubator, Microsoft has joined the ranks of other accelerators such as TechStars or Y Combinator. Its an investment in the technology of tomorrow, which is the reason Sood gives for teaming up with Microsoft in the first place.
“Microsoft is a pioneer, with a living founder and chairman who is now dedicating his life and the bulk of his wealth to make the world a better place,” Sood stated in his blog. “…I think there’s something to be said for how Microsoft has embraced the idea of working closely with startups. …In a lot of ways startups can innovate faster than big companies; they have an objective grip on the future that big companies may struggle to find.”