NEW YORK--What is the real reason why Microsoft Ventures Accelerator can choose to fund your startup for $500,000 without equity? Not only that, you get work in its Seattle office and have what graduates say are great meals as you work on your startup there.
Microsoft’s goal is to help startups foster exciting new ideas by providing mentorship, $500,000 of Azure Credit, access to the Microsoft distribution channel, without taking equity. About 80 percent of the startups that have graduated from its accelerators have received an average funding of $1.9M (USD) within a year from graduation. About 16 startups have reportedly also had exits with some of the top companies in the industry.
At the meetup last October 21 at the NYU Stern Building, host Tim Enger was circumspect and about the intentions of Microsoft—and it just made sense. “What do we get out of it? You use Azure. Then it becomes a business for us,” he said.
Microsoft is hoping that the startups they fund will use Azure, its open, flexible, enterprise-grade cloud computing platform, but in no way, he stressed, is Microsoft forcing people to use any of its software. It’s an investment the company thinks is worth the money they fund companies.
At what stage should your startup be to apply for funding? It turns out you must gained some traction already. However, Enger preferred the guests talked to him personally after the meetup to discuss their startup. There were also several decision makers from the Microsoft Ventures team at the meetup as well as the Microsoft Azure Machine Learning Product Group.
It was a night where information was not presented, even basic information like deadlines, if you didn’t ask the Microsoft team. Deadline for applications is November 20. Most of the questions asked revolved around the requirement for startups seeking funding. You must be in the machine learning and big data space. Enger said on Jury Selection Day, there could be 20 to 30 external investors, 5 senior level execs, and 14 companies involved.
Microsoft is working with startups these days because its CEO Satya Nadella believes “all growth comes because of startups.”
Enger even emphasized how on average more than one $1B-worth companies are born every month, with 90 percent of Fortune 500 companies planning on a big data initiatives in the next year. “More than 200 billionaires were created last year,” he said.
Two of its graduates presented, Outleads and Openhour. Outleads tracks when a web visitor calls or submits a form on your site. What’s interesting about is what it claims it can make your ad work by getting your data on salesforce and/from call center activities, among others.
Both startups recounted their experience and why they chose Microsoft. “It’s the clients they bring to your door, the relationships.”