Microsoft Will Invest More on Startups: Rahul Sood, GM & Partner, Microsoft Ventures
Few months ago, Microsoft folded its Bing fund, BizSpark program and its Startup Accelerators into a single entity, which will not only run accelerators across the world but also invest in startups. Rahul Sood, who was an entrepreneur and an angel investor before joining the company, took charge of the newly formed Microsoft Ventures. “Going forward you will see Microsoft make more investments…You will see Microsoft open up more accelerators in different parts of the world,” Sood told reporters at a press conference yesterday. Edited Excerpts.
After the restructuring, what changes can startups expect from Microsoft?
Microsoft is a big company and there is a lot going on. I came in 2.5 years ago and started an incubation center. In the meantime, there were accelerators being setup in different parts of the world. We also had the BizSpark program. We came together to consolidate everything with one vision and to have a very clear value proposition to startups.
Going forward you will see Microsoft make more investments. Our next step is to go back to the companies that have gone through our accelerator programs and pick the great companies to invest or help them grow. You will see Microsoft open up more accelerators in different parts of the world.
What is the typical size of an investment?
Microsoft does strategic investments and Microsoft Ventures does seed investments. Seed investments could be anywhere between $50,000 to $300,000. Strategic investments are for companies that Microsoft would like to partner with or acquire.
Is there a strategic investment in India?
From Microsoft ventures, there hasn’t been one yet. We are looking and we are close. But I can’t tell you yet.
Which areas will you focus?
We have different themes that we are going after. We are mostly interested in entrepreneurs solving big problems.
What do you look for when you invest in Startups?
Firstly, money is never a problem. The most interesting startups are by entrepreneurs who are solving a big problem that they really understand. I don’t look at revenue. So the size of the problem and how many users they have is important. I also try to see if the solution can be scaled across the world.
Indian startups get put into a place where there is very little equity and incentive for them to go much further. So they think of a quick exit. We have an issue here where entrepreneurs are giving away too much equity. Many accelerators take equity but at Microsoft we don’t need to do that.
What is the incentive for Microsoft to do this?
The entry barriers to a startup has never been lower. Today’s startups are tomorrows big enterprises. The biggest strength Microsoft has is basically we build great software and our relationship with large scale companies and small and medium businesses around the world. We help them build the business, pitching, branding, design thinking and then connect with customers. It will help us build relationships.