Interview with Mukund Mohan, Director Microsoft Ventures

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Microsoft Ventures

Mukund MohanMukund Mohan, director at Microsoft Ventures  heads the Asia-Pacific and Africa operations and is a well-known personality in Indian Startup Scene. While helping startups accelerate and grow via various programs at Microsoft, he is known to have strong opinions expressed in his personal blog bestengagingcommunities. We catch up with Mukund on Microsoft Ventures, criteria to select an Accelerator and his thoughts on Angel Funding in India.

How has Microsoft Ventures performed in 2013 ?

Microsoft Ventures as an entity started in June 2013. We have 3 parts to Microsoft Ventures – Accelerators ,Early Stage Seed Fund and Startup Engagement Program. For the accelerators, we have added 5 accelerators in London, Paris, Berlin, Moscow and Rio, in addition to the existing three. So, in total, it’s 8 accelerators all over the world now.  The Early stage fund invests between $50K and $250K dollars in a company. Typically, the instrument that we like to invest this is with a convertible note. This is not a very preferred instrument in India,but fairly extensively used in USA to a large extent. We typically invest in Seed round along with other syndicated investors. So far, its 7 or 8 investments done over the world including ones in China & Israel, and are looking to invest in India in the near future.

The third part is the engagement program includes BizSpark, events, working with entrepreneurs and partnership with entrepreneurial incubators and accelerators worldwide. So, we’ve got partnerships with companies like 500Startups and Kyron that allows us to be able to partner with other people helping the startup ecosystem as well.

As part of Microsoft Accelerator, what are your broad interests? What kind of applications stand more chance to get selected?

The Program is about 1.5 years old. Three batches have finished and we have accepted applications for 4th batch now.  We did get 300-400 applications for the 4th batch. Most of the applications have been in very standard technology oriented businesses such as SaaS, consumer internet services, mobile applications and some new areas such as Big Data Analytics, Drone & Drone Technology and Quantified Self measurement on health front. Traditional things like Adtech, Healthcare & Technology, Education & Technology always appear in the applications.

Founders are the most important aspect of the startup. The stage we operate in, most startups we work with have a prototype, some startup have a product and one or two customers validated in that set. So, they come to us to accelerate their pace – to get things done in a month’s time instead of 4 months. The acceleration is what we can help them more, than anything else.

We have taken applications across all the spectrums. Three most important things that would make applications move on are founders, disruptive product and large target market, in that order. At Microsoft Accelerator Bangalore, we have around 8 people in-house, part-time experts and network of around 100+ mentors that would help startups get accelerated.

Entrepreneurs who enrol in Microsoft BizSpark get free access to all the Microsoft Products to startup. Is this a move by Microsoft to ensure that the startups are later tied on to Microsoft products, rather than move on to Open source?

The cost of starting a company has come down dramatically, for a variety of reasons. At the very early stages, a lot of startups still do not have money. When a startup tries to get revenue stream, all the other costs have to be fairly low. That is one of the main reasons we like entrepreneurs to try our software. This is very similar to ‘try-before-you-buy’ concept for a couple of years, where they pay only after they sign-up for the platform.

Only single digit investments happen in Angel Investing, out of the hundreds of applications received. What do you think of this statistics?

I think it’s phenomenal. Here’s the thing. 95% of the companies that apply to the funding program do not realize that they do not have all the characteristics and metrics to get funded in the first place.Which means that, most investors want a return on their investment. That is the only reason they fund.  There are very very few investors who fund because they want to encourage entrepreneurs. If a company does not grow rapidly, the return on investment will not happen.

To give you a context, 32,000 startups get up and running in US every year. Only 3000 get funded. Is that a good number? Nobody knows. We have good companies in India, but most of them are not fundable by an External Investor.

What should be an entrepreneur’s criteria while selecting an Accelerator?

Every accelerator is a bit different, because they focus on different things. Our key focus for a startup is to help you get customers and make it business ready.Some of the accelerator’s intent is to help you build product or to make the startup from product ready to market ready. An accelerator’s job is to make things faster -whatever the task is. If an accelerator doesn’t help you to do what you want to get done faster, then it doesn’t make any sense to join an Accelerator. Also, find a fit between your current stage and Accelerator’s interests before taking a decision.