Graduation To Corporation

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An account of my experiences trying to start a game company after graduation. Presented at RIT, November 2009.

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Graduation To Corporation

  1. 1. Graduation to Corporation What not to do, from someone who did it Chelsea Howe Video Game Producer, ActionXL Co-Founder, Proper Walrus LLC
  2. 2. Proper Walrus, LLC <ul><li>Incorporated in DE </li></ul><ul><li>Foreign Entity in NY </li></ul><ul><li>2 Members </li></ul><ul><li>First Game: Tipoli </li></ul><ul><li>Awesome Publisher </li></ul><ul><li>“ I have my own company!” </li></ul>DISCLAIMER: I am still a no0b!
  3. 3. Why Create a Legal Entity? <ul><li>Protection! </li></ul><ul><ul><li>Not bound to default regulations </li></ul></ul><ul><ul><li>Stronger legal position in disputes </li></ul></ul><ul><li>Appearance </li></ul><ul><ul><li>Professional business cards, website </li></ul></ul><ul><ul><li>Initiative, organization, leadership </li></ul></ul><ul><li>Bonuses </li></ul><ul><ul><li>Tax deductible games anyone? </li></ul></ul>
  4. 4. Beginning the Process <ul><li>Get a lawyer. No, seriously. </li></ul><ul><ul><li>First consultations: FREE </li></ul></ul><ul><ul><li>Online law not as shady as you’d think. </li></ul></ul><ul><li>Face to Face vs. LegalZoom </li></ul><ul><ul><li>Proper Walrus tried both </li></ul></ul><ul><ul><li>LegalZoom: faster, more helpful, NOT trying to talk your money away </li></ul></ul>
  5. 5. What Entity? <ul><li>Partnership: </li></ul><ul><ul><li>Automatic for 2+ business owners </li></ul></ul><ul><ul><li>Unlimited personal liability!!! </li></ul></ul><ul><li>Sole Proprietorship: </li></ul><ul><ul><li>Automatic for solo business owners </li></ul></ul><ul><ul><li>Unlimited personal liability!!! </li></ul></ul><ul><li>Limited Liability Company: </li></ul><ul><ul><li>Own and manage </li></ul></ul><ul><ul><li>No personal liability </li></ul></ul><ul><li>Corporation (S or C): get a lawyer </li></ul>
  6. 6. Okay, let’s say LLC <ul><li>Where? </li></ul><ul><ul><li>Registration in NY is okay ($200 filing fee) </li></ul></ul><ul><ul><li>NY registration requires publicizing intent twice </li></ul></ul><ul><ul><li>DE is renowned for businesses, BUT </li></ul></ul><ul><ul><li>Regular reg + foreign reg = expensive (~$2000+) </li></ul></ul><ul><li>Proper Walrus </li></ul><ul><ul><li>Didn’t have time to publicize, chose DE </li></ul></ul><ul><ul><li>Foreign registration can be done up to 4 months after starting business (recovery period!) </li></ul></ul>
  7. 7. Finding a Publisher <ul><li>Graduates are a risk </li></ul><ul><ul><li>Unknown and unproven in real world </li></ul></ul><ul><ul><li>Need playable prototype or lucid design </li></ul></ul><ul><ul><li>Have design doc, proposed milestone ready </li></ul></ul><ul><ul><li>Portfolio should showcase production ability </li></ul></ul><ul><li>Rip-off? </li></ul><ul><ul><li>Get a specific list of marketing in the deal </li></ul></ul><ul><ul><li>Marketing is the main use of publishers </li></ul></ul><ul><ul><li>Does it matter? Get a game out there! </li></ul></ul>
  8. 8. “ Hiring” <ul><li>Proper Walrus cheated </li></ul><ul><ul><li>All assets hired via publisher </li></ul></ul><ul><ul><li>Publisher used interns/percents </li></ul></ul><ul><ul><li>Less paperwork for us </li></ul></ul><ul><li>Contracting vs. Hiring </li></ul><ul><ul><li>Wish I could tell you </li></ul></ul><ul><ul><li>:( </li></ul></ul>
  9. 9. Taxes <ul><li>What a nightmare </li></ul><ul><ul><li>Multiple cities, multiple states, multiple people </li></ul></ul><ul><ul><li>Ten foot pole </li></ul></ul><ul><li>We were ripped off? </li></ul><ul><ul><li>Paid $1,400 for an online business tax handler </li></ul></ul><ul><ul><li>Taxes don’t matter if you don’t make money </li></ul></ul><ul><ul><li>Better safe than sorry? </li></ul></ul>
  10. 10. A Professional Team <ul><li>Local vs. Remote Teams </li></ul><ul><ul><li>Everything depends on the people </li></ul></ul><ul><ul><li>Project will live or die by team </li></ul></ul><ul><ul><li>Proper Walrus experience </li></ul></ul><ul><li>Management / Production </li></ul><ul><ul><li>Communication, check-in (team AND publisher) </li></ul></ul><ul><ul><li>Keep to your milestones </li></ul></ul><ul><ul><li>Positive but realistic management (asset cuts) </li></ul></ul>
  11. 11. Is it worth it?
  12. 12. Tipoli <ul><li>www. playhaven .com search: TIPOLI </li></ul>

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