funding the future of mobile games - kristian segerstrale (initial capital) 22 oct 2013
DESCRIPTION
Keynote from GMIC 22 Oct 2013 covering the pros and cons of different forms of funding mobile games.TRANSCRIPT
FUNDING THEFUTURE OF MOBILE GAMES
Kristian SegerstraleCo-founder, Initial Capital
@ksegerstrale
QUICK INTRO
LP / CO-FOUNDERINVESTOR / ACCELERATOR(SUPERCELL, SWRVE ETC)
2010-
MOBILE GAMESCO-FOUNDER, VP
MACROSPACE($320M IPO)
2001-2007
SOCIAL GAMESCO-FOUNDER, CEO
($400M SALE TO EA)
2007-2012
EXEC VICE PRESIDENT, DIGITAL
( DISC TO DIGITAL )
2011-2013
STATE OF MOBILE PLAY
• Million dollar games • Billion dollar games
2012 2014
• No publishing leverage
• Fragmented companies• Dev budgets in $$ k• Performance marketing
• Global powerhouses• Dev budgets in $$ MM• Broad media mix
• Category opportunities• Evolving discovery
• No publishing leverage• Category opportunities• Evolving discovery
1BN MOBILE DEVICES SOLD IN 2013
Source: BI Intelligence
MOBILE DATA IS EATING THE WEB
Credit: Mary Meeker 2013
TABLETS OUTSELLING LAPTOPS
Credit: Mary Meeker 2013
EVERYONE IS SHARING EVERYTHING
Credit: Mary Meeker 2013
GLOBALIZATION OF DEMAND
Source: Mary Meeker 2013
SO THE FUTURE IS AWESOME!
BUT HOW DO I FUNDGETTING THERE?
GETTING FUNDINGIS A
RECRUITMENT EXERCISE
THREE TYPES OF FUNDINGPublisherFinancing
StrategicInvestment
SeedInvestment
+ Self financing & crowd funding
… … …
PUBLISHER FINANCING
• Access to marketing and monetization expertise• Access to technology and data• Access to cross promotion networks• Marketing execution
• You give up the majority of ability to invest in your business• You give up all intellectual property• You give up any chance to scale independently
Publisher finances, advises on development, handles marketing
• You want a lifestyle business making games• You can’t get funding from elsewhere
RIGHT IF:
SEED INVESTMENT
• Access to broad expertise from product / marketing to M&A• Partner to look out for you as shareholders• Assistance in company growth, further financing, channels• You keep and re-invest all revenue / profits
• You dilute your shareholding by 15-30%• You create governance around you (Board etc)• You agree that it’s important for shareholders to have a return
Investors buy 15% - 30% of your company for $300k - $2M
• You want to build something really big and change the world• You want to realize the value of your shares one day
RIGHT IF:
STRATEGIC INVESTMENT
• Access to industry expertise from product to marketing• Access to channels to market, technology, data• Assistance in company growth• You keep and re-invest all revenue / profits
• You dilute your shareholding• You create governance around you (Board etc).• You create a potential misalignment for further financing
Industry actor buys a share of your company at any stage
• You want to build a business that scales to be really big• You are comfortable potentially giving up financing options
RIGHT IF:
WHAT WE LOOK FOR @ INITIAL CAPITAL
1. Talent team and what you’ve
made together
2. Creative first vision and passion for a style
of game
3. Market awareness healthy push and pull inside of team
4. Chemistry would we join this company
5. Location san francisco, london, finland
What you love toplay and make
What you think themarket will love
DISASTERZONE
HIGH RISKZONE
MAKE THIS
FINAL PIECE OF ADVICE