Microsoft's Bing Fund takes angel investing to the next level
Microsoft has entered into the startup investment world in a big way with its Bing Fund, an angel investment fund and incubator. It's always a positive thing for the entrepreneur community when a company with major resources decides to give a helping hand to startups, but what's especially exciting about the Bing Fund is the innovative approach it's taking. Bing Fund isn't just another angel fund. Mind you, we can never have enough angel investors out there—but look for some exciting, powerful and potentially disruptive ideas coming out of Seattle in the near future.
I spoke with Bing Fund's general manager and entrepreneur in his own right, Rahul Sood, about his approach, and what Microsoft is looking to get out of its new venture. You can read the entire conversation here. Sood describes Bing Fund as more of an "archangel" than an "angel", in that they not only put up their own money, they are working with other angel investors and venture capitalists in partnership. Sood believes in "smart money"—which means getting funding from people who can help you accomplish your goals, and add value. And that's where their "archangel" status comes in. "One of the things I set out to do when we started this thing is, rather than competing with angels and trying to get them to go and do this thing on their own, why don't we partner with them? Why don't we find angels who love to invest their money in different things, and say, 'we'll be an angel with you.' Just think of us as an archangel. And they love the fact that we're willing to do that."
But like any good investor, there's more to it than just money. "You can get money from anywhere," said Sood, perhaps a bit too optimistically. What Microsoft brings to the table, besides money, is resources and access that would otherwise be nearly impossible to tap into, even with other angel funds. Microsoft, like most large tech companies, have grown by taking two complementary tactics: Bringing on a whole bunch of smart people in-house, and having an extended sphere of influence of even more smart people. The startups which are lucky enough to get into the Bing Fund inner circle will gain access to that sphere of influence—something that a startup entrepreneur would otherwise have a very hard time cultivating. But it doesn't stop there, those who are under Bing Fund's wing will also get access to technology, access to subject matter experts and Microsoft executives, and even an option to have co-workspace in their Seattle facility. With all that, the angel money itself almost takes a back seat in terms of importance.
The big question now on the minds of Internet entrepreneurs is, how to get the attention of Bing Fund? Sood doesn't have any bias about the specifics of the company, so long as it's in the online space, it's disruptive, and has the potential for Microsoft to potentially partner with or acquire down the road. But ideas are cheap, and good ideas alone don't get money, from Bing Fund or anyplace else. Besides a great idea, Sood wants applicants with a strong vision, and a solid team that is dedicated to that vision. "If you talk to any seasoned investor, they'll tell you that it's less about the company, and more about the team to start," he says. "If the team is a good team, they have a good focus and a good vision of what they want to achieve, and they know the problem they want to solve, it's those types of companies that are getting the funding. It's companies that have a clear value proposition, a clear vision, and a team that's willing and capable of executing. . . . we like deals where the founders are people who really live, breathe, understand, and develop the product."