We invest in teams with promising games both independently and within the framework of syndicated investments, in conjunction with other funds and angels. Our main focus is to invest in games that show good enough results at the soft launch stage; however we sometimes invest at earlier stages as well.
Why do investors need my game?
You should initiate negotiations with investors before the beginning of game development. Yet, the reasonable and appropriate timing for attracting investments in game products is when a new game prototype is ready. It is ok if the product is a rough game prototype that may lack some game mechanics or feature mediocre graphics, because together with a presentation, a financial model and the founder’s sparkling eyes this should work. Before the prototype stage it is best to work on game development using your own enthusiasm and resources.
Having a clear answer to the question ‘Why would somebody want to invest money in my game?’ is critical. Astonishingly, the majority of indie developers have no clear and meaningful answer to this question.
It’s worth knowing that normally, funds and angels invest for three reasons:
- Capitalization growth. This first of all refers to institutional venture investors and business angels. The idea is to buy, say, 15% of the game with a $200K estimate at a seed-round and sell one’s share at an A-round with a $1 000К It is an easy way of getting 300–500% profitability within a relatively short period of time.
- Operating profit and synergy. This mainly refers to final stages of investment and the Exit stage. If a product gains recognition among a big number of game players, at some point it becomes interesting for large successful studios and publishers who are ready to buy out 100% of the game. Their purpose is to build the product into an already existing infrastructure and get additional synergy from, say, cross-promotion in games that already exist. At its early stages, the product will hardly be of interest to such investors.
- Fun. The most legendary and desirable type of investors. These are usually people who earned capital from traditional businesses and are willing to try something new. They often invest in a game just for fun without expecting to make cosmic profits or receive capital gains. Yet, when receiving money from such an investor one should be aware that he will want to dominate the process and impose his own ideas.
The process of investment in the sphere of game development usually consists of three to four stages or rounds.
- Seed. Sums of up to $100К, less frequently – $200K. Non-professional investors provide money for fun, or small funds and business angels invest due to aspiring for capitalization growth. The risk level of investments is the highest at this stage, and the money is usually given for developing the product and bringing it to a soft launch.
- A round. $500K–1500K sums. Professional investors having a clear aim of capital growth come at this stage. Before investing they will make sure it is a promising product, KPI are fulfilled to ARPU and Retention, there is no legal jeopardy and intellectual property is protected, etc. Investment funds come solely in case of a clear understanding of who can invest at a B round or who is interested in becoming a strategic investor and can buy them out completely. Investments at this stage are mostly headed for bringing the game products to the operational stage. The ratio of expenses on the game development to those allotted for marketing is approximately 50 : 50.
- B round/exit. The sum of money equals $4 000К+. Major risks have already been overcome at this stage, and finding big money in a short period of time is required to attract game players and to launch mechanisms to the full extent. Sometimes the B round does not take place, as instead of another investment fund there comes a strategic investor who buys out a major part of the game and carries out marketing activities at his own cost.
We continuously keep in contact with over 100 investors interested in games – from small angels and rookie investors to large funds and strategic studios. If you have a promising game, we will surely help you attract financing.