Develop2013: Raising funds (for games/games-related ideas) in the UK


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Delivered by Alice Taylor & Jo Twist at Develop 2013. Covers basic notes on how to raise funds, from VC and angels to grants, tax breaks and crowdfunding.

Published in: Business, Economy & Finance

Develop2013: Raising funds (for games/games-related ideas) in the UK

  1. 1. Doing a startup, raising £ ... in the UK Intentionally self-explanatory powerpoint with no pictures, for you to takeaway after the event.
  2. 2. Most new joiners to Ukie are startups or small businesses of some kind. Some are funded by publishers, some by venture capital, some by grants, and some by themselves ("bootstrapping")... and some too, but not many yet, by crowdsourcing. Indie, startup, business...
  3. 3. The big picture stuff... Creating the right foundations for businesses, esp startups. Following Ian Livingstone's 5 Ps: Perception People Pipes (decent broadband) Property (intellectual: create it, keep it) Pound... (raising finance)
  4. 4. If you can't bootstrap... Kristian Segerstrale sez, go for VC. He would, because a) he did and b) he's a VC now, but his main point is: "...The typical publisher value-add of financing, marketing, technology and distribution through retail channels doesn’t translate well to the digital world." Do you agree?
  5. 5. The quickie basics of starting up... Got a founder or three? Choose wisely: it's a bit like getting married. Assume a 4 year minimum commitment. Get a good accountant who knows about grants and breaks. Get a good lawyer who can give you financial introductions. Startup contract-negotiation costs (with VC, say) will be about 10K at the lawyers, and 5k at the accountants. Hopefully less!
  6. 6. Fundamentals: Biz Plan There's a Biz Plan visual model, thanks @thulme. Fill it in, write it up. It works!
  7. 7. Fundamentals: Pitch Deck Who are you pitching to? Tailor the below. The ~10-slide VC deck (Mark Suster is #1 <3): Team, Problem, Solution, (demo), Market, Competition, Traction?, Financial Projection, Product Plan (spend plan), Team (XP), Appendix if required. 10 slides, 20 minutes, 30 point font (like this). We put pictures in ours, and had to explain 3D printing too, so ours was 13. Oh well.
  8. 8. MakieLab's (VC) Seed pitch deck
  9. 9. MakieLab's Seed pitch deck
  10. 10. MakieLab's Seed pitch deck
  11. 11. MakieLab's Seed pitch deck
  12. 12. MakieLab's Seed pitch deck
  13. 13. MakieLab's Seed pitch deck
  14. 14. Fundamentals: Pitching (anyone) How? Never read off paper. Sell! Be funny. Be nice. Elevator pitch (30secs, 3mins) down pat? Be positive: skip that self-deprecation, Brits. Be friendly, relax. They want to know you. Follow up with a thank you. Then follow up again, later. Stay in view. "Lines, not dots." It's all so easy to say. Practice as much as you can. Doing talks on stage is practice. Pitching to folks you don't care about is practice. Don't disappear from view.
  15. 15. Types of funding VC: For Big/Fast ideas. Will want equity and preferences. What can they bring to the table for you? You will have to form a Board, because you will have Shareholders. Angels: have different reasons for investing. Will want equity. Use AngelList. SuperAngels. Publishers: ...want your IP :-) Crowdfunding: Seedrs (equity), Kickstarter. Grants: TSB, tax breaks.
  16. 16. Funding: VC How many Nos? Expect... 50? 100? Terms: who sets them, what are they? Valuation: who sets it, for how much? Pre-money? Post-money? Convertible note? Dilution? Cap table? Pro rata? First refusal? Returns? What do they want to see? Cold on games right now (because of Zynga), but it's cyclic.
  17. 17. How much will you give away? Generally, a new startup taking Seed money will exchange about 30% of the company (equity) for the funds. At Series A, you'll probably give away another 30%. If you've had a F&F round, you may be another 10% down. And what if you need bridging rounds? Many famous entrepreneurs had approx 3% of their company left by the time they IPOd or were bought.
  18. 18. Funding: VC: (Some of) the Brits London Venture Partners (games rockstars!) - David, David, Phil & Paul EC1 (seed, 100k) - Julian Connect Ventures (100-300k) - Sitar Teli Initial Capital - Kristian Segerstrale Passion Capital (seed, 150k) - Elaine & Stefan Accel Partners - Sonali, Kevin Index Ventures - Saul Klein, Ben Holmes (later/bigger) Balderton - Harry Briggs/Roberto Bonanzinga Eden Ventures (some seed) - Ben Tompkins SOS Ventures (100k) - Bill Liao Profounders - Rogan Angelini-Hurll Wellington (some seed) In generalish order of likelihood to want to see games/game tech/SaaS
  19. 19. Funding: VC: (Some of) the Euros Lifeline Ventures - Petteri Sunstone Capital - Nikolaj EarlyBird - Ciaran Northzone Creandum Mangrove eVentures DN Capital Dawn Capital Holtzbrinck In no particular order. Berlin is where it's generally at, along with Copenhagen and Helsinki.
  20. 20. Funding: VC: (Some of) the Americans Spark Ventures - Nabeel Andreessen Horowitz - Brian Cho, Frank Chen True Ventures Benchmark Capital - Mitch Upfront Ventures - Mark Suster 500 Startups - Dave McClure, the sweary VC DFJ Jain - Rio Mayfield Union Square Kapor Capital ... and a zillion others. You'll need to fly a lot, though, and probably move there too.
  21. 21. "You have a great Team. We love the Technology! Come back when you have Traction, a million+ users." "What's your user acquisition strategy?" "How will you compete with X...?" / "What if X copies you? What's your moat?" Stay in touch. Have a good answer. You will hear this sort of thing..
  22. 22. (Funding: Corporate Venturing) Dena, Gree, Disney, etc. Usually only purchase at larger valuations (multiple 100m) after proof of huge success... T-Ventures: where it fits with mobile? Appearing: advertising agencies with venturing arms, e.g. Mother, Wieden & Kennedy? Standfast Interactive - not quite a VC, not quite a publisher?
  23. 23. Funding: Angels Easier to pitch, harder to find. Will flock in if you have VC interest. EIS / SEIS compliance is a major incentive for them. AngelList (it's gameable, watch out for that) CityMeetsTech, Capital On Stage New SuperAngels: Wren, AngelLab, PlayFair, Hoxton, BallPark... Never pay to pitch.
  24. 24. Funding: Accelerators 50k and a desk for a few months?: Seedcamp / Springboard StartupBootcamp OpenFund Wayra TechStars is helpful. There are plenty more across Europe.
  25. 25. Funding: Crowdfunding Kickstarter, IndieGoGo: structure via Thomas Bidaux' work. "You bring your own audience." Will cost £. "If you've made 30-40% in Day One, you'll make your Ask." Famous people do better. Seedrs, Crowdcube: for equity. Quite good for figuring out if your idea has legs, before you have to go and build it. Only Quite Good, because the funders are only a slice of the market...
  26. 26. (Funding: Publishers) Not going to tell you lot how to pitch a games publisher :-D
  27. 27. Funding: Tax Breaks R&D breaks (now): technology & problem- solving Production breaks (soon): creativity & production Don't be put off by the word "tax". It is a relief from corporation tax. Get your accountant on it, but if you've chosen the right one, they will have done that anyway.
  28. 28. Qualify?
  29. 29. Funding: Prototype grants TSB Competitions (occasional) TSB SMART (cyclical) ICTomorrow Abertay Prototype Fund prototypefund. Huge paperwork overhead, and often a need for academic-speak. We won one, and failed five. If you can get help writing the application, do.
  30. 30. In sum... Bootstrap if/where you can (own money, f&f, crowdfunding, grants, breaks). It's your company. Grow at your own rate. If you have something you can't afford to do on your own: VC/Angels means you keep your IP, but you lose some of "your company". You will need to go Big, Fast.
  31. 31. Questions and Stories Ask us anything =^-^= Got any tips, stories or data to add? / @wonderlandblog / @doctoe