How to get investment for the first project … and complete it
You came up with an ingenious game idea or even prepared a prototype and now you ask yourself the question: “Where can I get the money for implementation?” Let’s figure out the possible ways and pitfalls with our graduate of Game Project Management and co-founder of the Uniday Games studio Alina Sitbatalova using the example of the Puzzle Squad project, which she does with her team.
Alina’s story
Before joining the course, Alina worked in an outsourcing IT studio, where she and several colleagues decided to develop the first game. They put together a small studio, where 3-4 people are constantly working now and sometimes outsourcing is used. For several months, the team thought about the concept, until at some point the idea of a butler puzzle came up. Examples of such games: Best Fiends, Empires & Puzzles… Then the search for the main feature began and thus we came to a solution in the form of Tetris. The prototype was assembled in two weeks, and then the search for an investor began.
Types of investors
1. Banks
This is probably the most common, but far from the most successful way to find an investment. If you are sure that you will succeed and you will be able to pay dividends on time, then perhaps this method will suit you.
2. Venture investments
Venture capital investments are used by both companies and individuals. The difference between this method is that such an investor gives money to various startups, but little by little up to $ 100,000 per project. Usually this is the amount that is required for a prototype or mvp, in order to then go to the next stage of the search for investments.
3. Public investment
State investments are most often used in the development of large businesses. Perhaps, if the state decides that the gaming industry is a promising industry for the state, then there will be a chance to use this method.
4. Private investors
As the name suggests, this type of investment comes from individuals, sometimes from companies. Typically, these investors purchase a stake. The method is controversial, because there are no guarantees that the investor will not decide to start controlling the project, which may ultimately lead to unknown consequences.
5. Business angels
This is a type of private investment, but with a small condition that the investor invests in the area in which he or she understands. On the one hand, this is a good way for a startup to understand the intricacies of the field of activity, to get advice and help from an investor. On the other hand, possible intervention from the investor and the development process, as in private investment.
Of course, there are many more types (there are family investments and crowdfunding, etc.), there are also many typologies.
As for the type, investors are generally of two types:
Profile: The profile investor understands the area in which he is investing. In the gaming industry, these are producers or people who understand it. It will be difficult to talk to such people at the first stage, because he will pay a lot of attention to your project.
Non-core: Non-core investors invest money in different industries and cannot keep track of everything. They are more likely to pay attention to what kind of team you have, what experience. It is easier for young developers to talk to such investors, because communication is on an equal footing. After studying all kinds of available information, Alina’s team, according to the terms, chose a non-core venture investor for themselves.
Enterprise Ireland
You must understand that communicating with an investor or speaking is not an exam or even a search for money. You are proposing a partnership. And as a partner, you must be confident and honest.
Then the process of searching for the investor itself began. Of course, the first thing that comes to mind when it comes to IT is Silicon Valley and the United States in general. But you need to understand that the United States is one of the leading countries in the gaming industry, and this is a very big competition. To increase the chances of the project’s success, the search for an investor was narrowed down to European countries.
The search ended when Alina saw a post on her Facebook friend’s page announcing a competition for venture investments in a government organization. Enterprise Ireland… This organization holds such a competition several times a year for people from all over the world and to participate you just need to fill out a form that looks like an excerpt from a business plan. The competition is held in English, so it is better to prepare a little.
After collecting all applications, the first selection of participants takes place. Try to fill out the application as clearly and understandably as possible: what is the game about, what is the team, what are the key features, etc. The competition, although smaller than in the United States, is still great. A well-executed application increases your chances of making the first selection. The second stage is a video interview. The questions are known, so you can prepare in advance.
When this stage was passed, two months of waiting began. For this period, we have frozen development. And after two months, we received the result that we passed and we need to fly in person to the next stage. The organization paid for the flight and hotel for one participant and the team decided that Alina would fly. In total, about 15 teams participated, 4 of them were from Russia and 3 of these teams received a grant.
I was a little unsure, because almost all the participants came in teams, and I was alone
Before going to perform, all the participants were taken to the preparation room. At first, Alina was nervous, but then she calmed down and during the performance she realized that she was talking about what was interesting to her. The letter of happiness came in 2-3 months.
Organizational moments
The conditions for receiving grants were as follows:
The team must move to Ireland (optional)
Open a legal entity in Ireland
Open an account with an Irish bank
To everyone’s surprise, opening a bank account turned out to be more difficult than obtaining a residence permit. The team received the residence permit in one day. It was also easy to register a legal entity. It is enough to hire a lawyer who draws up the transaction, then the fee is paid and the company is opened.
But the bank account turned out to be a pitfall. It is very difficult for a non-resident of Europe to open an account in a European bank. In total, it took 8 months to open an account for a citizen of the Russian Federation. But these torments were rewarded in full and, in addition to the money, the team received a good investor.
Tips from Alina
Start by choosing a project that doesn’t require metrics. Our team was faced with the fact that we have chosen a very traffic-intensive genre, and publishers and investors are reluctant to work with unknown companies and are skeptical of it.
If experienced people tell you that the project is not viable, then you do not need to quit right away, but it would be good to think about what to fix in the project so that it gets a chance for life.
If you go to study at “Game project management”, Then go immediately with a project or a team, if there is no idea and a team, then immediately from the first lessons look for suitable people.
Questions from listeners
At what stage should you approach an investor and a publisher?
We went to the investor as soon as we made a prototype in two weeks. You can come up whenever you want, the question is whether they will talk to you seriously. As for the publisher, it depends on the game, but more often than not, some metrics are already required. We were lucky that our publisher saw the potential when we had 20% percent ready
The recording of the speech can be found at link on the game developers YouTube channel.
We invite you to discuss even more aspects of game development, as well as study, work and creativity in the gaming industry at open daywhich will be held online 28 of October.
Lecture author: Sitbatalova Alina
