Investors?
Hey everyone,
So I was just wondering something, say a small company or indie team had a good prototype or concept, how would they get an investor?
Does an investor approach them or the other way around?
Always wondered this.
So I was just wondering something, say a small company or indie team had a good prototype or concept, how would they get an investor?
Does an investor approach them or the other way around?
Always wondered this.
Replies
You have 2 types of investors, "Angel" and "Institutional".
Angel investors are usually high net individuals/groups that invest money into your company in exchange for stock/ownership in the company. More Rarely, they will invest for royalty or ownership in the product; but this is exceptionally rare.
Institutional investors are essentially banks and venture capitalists; you can
rule these guys out if you don't meet their extremely strict criteria (please note that MOST games companies don't meet this criteria).
Something to really get a firm grip on right now, is that it's HIGHLY unlikely you'll find someone willing to invest in a project. Most intelligent investors will invest in a company , with infrastructure, and a source of established revenue; a "team" is not a company. Finding someone to "take a percentage if they put up the money" is not something that happens in real life, it's a very basic outlook on a much more complicated situation.
Your best bet, if you have a good demo, is to consider pitching it to publishers. after the initial online stuff, be willing to fly out and meet them in person, to show them your demo and make a personal impact. I'll give you a little tidbit the dev director at THQ told me about 7/8 years ago, "If your demo is not a representation of the best you can do, don't show it. Nobody wants to hear , 'this will look better once you publish this and we have money' ".
From a business perspective, your best bet is to either have a stellar demo, or to bootstrap your company. There are many opportunities for games to succeed these days through online distribution. Investors, rightly so, stay away from this industry (save the upper rungs).
cheers mate, I wish you luck and success.
I am more then willing to fly out but I would fly there to take a chance, how do I get a hold of the right people?
We are trying to get a hold of publishers but it is extremely difficult.
most investors are so cautious that they want to see a track record of success, example: you prove you can make a small game that does well for under a million, then maybe you prove yourself with a 1-2 million dollar larger game, then you could probably start looking to develop on a wii or budget pc title budgets of 2-5 million.
having a track record of success proves to investors you will actually finish the game instead of just wasting all the money and declaring bankruptcy. trying to find investors to chip in on one game project will be extremely hard. having an insanely detailed business plan that projects your company growth for the next 10 years will be far more attractive to anyone investing in the company.
here in vancouver there are smaller dev companies that start up all the time and focus on making casual games/steam/xbla titles to prove themselves.
then there re leads and execs from the huge studios like EA or Radical that after working tehre for 10 years or so decide to form their own studio and have a huge amount of contacts at publishers, and can manage to break out an awesome business plan and partner with a major publisher. a good example would be Propaganda partnering/being bought by Disney interactive studios before pumping out turok. or United Front Games partnering with sony for Mod Nation and Activision for True Crime.
they were able to get these titles into production because the people forming the studio had major ties at the publishers from their former positions.
I dont know what track you are looking to get into in terms of project size etc. but its far easier to start smaller and low risk, even if you eventually want to be making big AAA titles.
Games dev is a business before all else and having a proven track record and a good name is really going to help you be more successful, even if you think you have the next big idea, people want to see you can deliver on that idea.
My biggest problem would be going too far into development and not getting a publisher or an investor. I do think downsizing the project is a great idea but it might be a huge shock to the team if that decision is made and I am positive we will see many dropouts of some of our very talented members.
if you want to make a fun game, just make it
if you want to make a game that is fun and has AAA quality, make the fun part first, and then get noticed, i think conventions, hostage situations, and blackmail are good strategies.
of course, what do i know, i'm trying to do the same thing....
quite literally walk in, and say "where's your acquisitions guy? he NEEDS to see this". and then don't leave until someone has come down and actually looked at it.
it's the method that is tried and tested on all kinds of new products.