20th February, 2008: Mitu @ GDC Roundup – Day 2: Session – “Early Stage Funding For Gaming Startups”
So my day started bright and early again on Wednesday 20th February – the first official day for those of us attending the ‘Main Conference’.
I’d been looking forward to this particular session for quite a while – and I was not disappointed. Matthew Le Merle, President of Keiretsu Forum San Francisco, and CEO of Gameplay Holdings LLC, hosted this great session about funding gaming startups, focusing particularly on Angel Investment. Not surprisingly of course, since Keiretsu Forum is, as I found out, the world’s largest angel investor network (with 750 accredited investor members throughout sixteen chapters on three continents). They are very active in investing in digital media and entertainment, and are actively seeking opportunities. I learnt lots of great practical information which complemented the kinds of things I’d been learning at the Kauffman Foundation previously, about angel investment.
Some of the key points I took away (both things I learnt, and things I suspected and had reinforced) were:
- Most games startups begin by bootstrapping by doing contracted work, adopting a ‘Work For Hire’ approach.
- Investors are more interested in the company rather than the current product it’s developing. They look for:
- A great team – indeed, this is what they care the most about in most cases. Whether it’s the right team for the particular opportunity, and whether the team is committed and passionate.
- Big opportunity / tailwinds
- Whether it’s an investable plan – i.e. how to return on their money
- Angels are long-term investors, usually 5-7 years, so this is an advantage over VC’s potentially.
- In most cases, they require proof that the founders have used their own money already in the company.
- Most angels really enjoy getting involved.
- In preparing for fundraising, it is extremely useful to watch other angels pitch – Keiretsu Forum are apparently very happy for people to come in and do this!
- The pitch should have 10 slides, take 20 minutes, and be written in 30 pt font. The slides should include:
- Problem
- Solution
- Business Model
- Underlying magic/technology
- Marketing and sales
- Competition
- Financial Deal
- Expect to give away lots of equity to angel investors.
All in all, I thought the session was incredibly useful for myself (I certainly gave it 5′s across the board on my scorecard!)
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