July 27, 2012, 9:41 AM — ITworld's Dan Blacharski recently spoke with Bing Fund's general manager Rahul Sood about what the angel investment fund and incubator can offer early startups, how it plans to partner with VCs, and how crowdfunding changes the game.
Following is an edited transcript of that conversation.
Dan Blacharski: Tell me more about Bing Fund, and what you're trying to accomplish there.
Rahul Sood: I would say that there's never been a time in our history where the barriers for entry for startups have been so low, and the accelerant so high. And since the accelerant is so high we thought that the Bing Fund would be a great way for us to connect with startups, help them reach critical mass, and bring the best of what Microsoft can bring to really help them with their later stage acceleration. You know, help them get access to technology, to experts, and exposure to users. And really the most interesting piece is the technology that we would offer them. And we would do this in such an entrepreneur-friendly way, i.e., we put skin in the game to demonstrate that we're not just here to just partner with companies, we're here to say, look, we believe in you and we're going to invest in you both with people and technology. And ultimately what we'd like to do is build these relationships with a select group of startups. We can only work with a limited number at a time. And then, help them get to their Series A or their next point of graduation. And then bring in another startup. And eventually, a win for us would be to turn it into a potential partnership or acquisition.
DB: Do you think that needing less money to start, especially for an Internet company, is that going to in some cases eliminate the need for a full-on venture round later on? Can you start it for $50,000 or $100,000 and have a flourishing company?
RS: Well, it's rare, but it's entirely possible. The first company I started with was completely bootstrapped with a $3000 credit card. And it turned out to be a viable business. But it took a long time to get there. To grow a business organically is difficult. And the other thing is, I'm always interested in companies that bootstrap. I'm interested in entrepreneurs that are scrappy, that want to raise less because they truly believe in capital growth. And so, if you find companies that are burning money all the time, and they're on a Series D and they have lots of people, and there's really no path to profitability, that's always a problem. So I think it's possible to do it.