Funding the future of mobile games - Kristian Segerstrale (Initial Capital) 22 Oct 2013

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Keynote from GMIC 22 Oct 2013 covering the pros and cons of different forms of funding mobile games.

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  • Total smartphone penetration 1Bn in Oct last year. Now sales 1Bn.
  • Higher quality, contextual.80% Facebook mobile. 60% of groupon commerce mobile.
  • Session length, different use cases.
  • Excludessnapchat, whisper, wechat
  • 35% of GDP in US / Europe. Tech standards and comms makes rest of the world accessible.
  • Funding the future of mobile games - Kristian Segerstrale (Initial Capital) 22 Oct 2013

    1. 1. FUNDING THE FUTURE OF MOBILE GAMES Kristian Segerstrale Co-founder, Initial Capital @ksegerstrale kristian@initialcapital.com
    2. 2. QUICK INTRO 2001-2007 MOBILE GAMES CO-FOUNDER, VP MACROSPACE ($320M IPO) 2007-2012 2011-2013 SOCIAL GAMES CO-FOUNDER, CEO ($400M SALE TO EA) EXEC VICE PRESIDENT, DIGITAL ( DISC TO DIGITAL ) 2010- LP / CO-FOUNDER INVESTOR / ACCELERATOR (SUPERCELL, SWRVE ETC)
    3. 3. STATE OF MOBILE PLAY 2012 • • • • Million dollar games Fragmented companies Dev budgets in $$ k Performance marketing • No publishing leverage • Category opportunities • Evolving discovery 2014 • • • • Billion dollar games Global powerhouses Dev budgets in $$ MM Broad media mix • No publishing leverage • Category opportunities • Evolving discovery
    4. 4. 1BN MOBILE DEVICES SOLD IN 2013 Source: BI Intelligence
    5. 5. MOBILE DATA IS EATING THE WEB Credit: Mary Meeker 2013
    6. 6. TABLETS OUTSELLING LAPTOPS Credit: Mary Meeker 2013
    7. 7. EVERYONE IS SHARING EVERYTHING Credit: Mary Meeker 2013
    8. 8. GLOBALIZATION OF DEMAND Source: Mary Meeker 2013
    9. 9. SO THE FUTURE IS AWESOME!
    10. 10. BUT HOW DO I FUND GETTING THERE?
    11. 11. GETTING FUNDING IS A RECRUITMENT EXERCISE
    12. 12. THREE TYPES OF FUNDING Publisher Financing Seed Investment … + Self financing & crowd funding … Strategic Investment …
    13. 13. PUBLISHER FINANCING Publisher finances, advises on development, handles marketing • • • • • • • RIGHT IF: 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 • • You want a lifestyle business making games You can’t get funding from elsewhere
    14. 14. SEED INVESTMENT Investors buy 15% - 30% of your company for $300k - $2M • • • • • • • RIGHT IF: 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 • • You want to build something really big and change the world You want to realize the value of your shares one day
    15. 15. STRATEGIC INVESTMENT Industry actor buys a share of your company at any stage • • • • • • • RIGHT IF: 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 • • You want to build a business that scales to be really big You are comfortable potentially giving up financing options
    16. 16. 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
    17. 17. FINAL PIECE OF ADVICE MAKE THIS HIGH RISK ZONE What you love to play and make DISASTER ZONE What you think the market will love
    18. 18. THANK YOU! Kristian Segerstrale Co-founder, Initial Capital @ksegerstrale kristian@initialcapital.com

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