Microsoft Confirms Bing Fund, a New Angel Investment Vehicle

7/12/12Follow @curtwoodward

Microsoft’s enthusiasm for early stage companies is getting turned up another notch.

Today, the company is pulling back the curtain on its new Bing Fund, an angel investment program targeting online and mobile startups. The fund is headed by Rahul Sood, a former entrepreneur who sold niche computer maker VoodooPC to Hewlett-Packard in 2006.

Details about the new investment effort have been dribbling out in recent days, particularly thanks to the sharp eye of CNet’s Mary Jo Foley. Microsoft is now saying more about the fund, including an interview doled out to VentureBeat.

The Bing Fund will invest up to $100,000 in a limited number of early stage companies that are beyond the idea stage, saying on its website that startups should at least have “a working prototype and a solid business plan.” It also has offices for portfolio companies, and touts access to Microsoft experts in areas such as search, natural user interfaces, and machine learning.

At a high level, that playbook—investment, mentorship, and group offices—sounds similar to independent early stage funds like Seattle’s Founder’s Co-op, which manages a pooled investment fund and connections to a strong group of mentors, along with Seattle offices that also house many of its portfolio companies.

But there are still some big questions about Microsoft’s approach, including the size of the fund, whether it has any portfolio companies yet, and exact source of the investment cash. Sood tells VentureBeat that the investments will be $50,000-$100,000 in convertible notes, a pretty standard angel investing instrument that starts out as a loan and can turn into equity later.

On his personal blog, Sood says the Bing Fund will invest in “fewer than a dozen startups at a time. When one graduates … Next Page »

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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