Microsoft's Bing Fund will give online startups cash, advice, and discounts
After playing coy and dropping hints for weeks, Microsoft has finally announced its newest incubator, the Bing Fund. — The Bing Fund will invest $50,000-$100,000 in early-stage startups, through standard convertible notes …
Context & Ripple Effects
The announcement closes a short tease: ZDNet reported on July 8 that Microsoft was preparing an angel-style incubator, and the company has now confirmed it — the Bing Fund will put $50,000-$100,000 into early-stage startups through standard convertible notes, alongside advice and discounts. The pickup was broad for a program this small, with TechCrunch, GeekWire, Xconomy, The Register, and WebProNews all carrying the story within a day.
The Fund extends a pattern rather than starting one. In 2008 Microsoft began giving startups software and cloud services nearly free through its partner programs (software and cloud services for (almost) free), and since launching Bing in 2009 the company has been under pressure to show the search engine can pay its way — an executive argued in 2010 that Bing would make money. A fund branded around Bing ties early-stage deal flow directly to that effort.
First-order effects
- Early-stage startups gain a new non-dilutive-at-entry funding source: $50,000-$100,000 checks on convertible notes from Microsoft, plus access to advice and product discounts they would otherwise buy.
- Microsoft gains a formal pipeline into seed-stage companies whose products can be steered toward Bing integration, instead of courting them ad hoc.
Second-order effects
- Existing Seattle-area accelerators and angel groups now compete against a corporate check writer that can bundle distribution and discounts with capital, pressuring them to add platform perks of their own.
- Rival search and platform players face the same logic: if Bing-branded capital buys ecosystem loyalty cheaply at the seed stage, Google and others have reason to formalize their own startup funds rather than rely on partnerships.
Third-order effects
- If the model holds, corporate seed investing becomes a standing layer of the startup financing stack — platform owners using small convertible-note programs to shape their developer ecosystems years before acquisition or partnership decisions.
- Branding a fund around a single product like Bing makes the incubator's success a public test of that product's strategic commitment inside the parent company.
The trend: Large platform companies are moving from free software giveaways toward direct seed-stage investing as a way to cultivate their ecosystems.