Delivered at Casual Connect Europe 2017. VR is becoming one of the hottest sectors for investors, but it is still very hard to get investment for gaming studios. This session will introduce best practices for how to fundraise for VR gaming studios.

1. Jikhan Jung
CEO @Subdream Studios, Inc.
Fundraising for VR Gaming Studio

2. Disclaimer :
This will be totally based on the personnel experience from the latest
fundraising experience, and focus on early stage of seed rounding.
Each case will be different.

3. 1. Introduction of Subdream Studios / Jikhan Jung
2. Experience to share
3. Database to share
Table of Contents

4. Founder & CEO of Subdream Studios, Inc.
- VR
CEO @ COPOPL NI (Continue to Subdream)
- Mobile – VR
Executive Producer @ Kabam (Acquired by Netmarble in 2016)
- Mobile
Founder CEO @ Gala-Net (Acquired by Webzen in 2013)
- PC
Jikhan Jung
Only Seed round, and that’s it

5. Title Launch Date Downloads Highlights
April 28, 2016 ~50K
• Vive (Oculus Touch version in development)
• 2nd highest playtime for Steam VR games (Link)
• Featured on major media (Venturebeat, Upload)
• 20+ VR Arcade Partnership
August 12,
2016
~40K
• Oculus & GearVR Multi-platform release
• ~10% of Revenue from In-App Purchases
• Featured on Oculus & GearVR store 2 times
October 19,
2016
~0.8K
• Vive
• 100% positive user reviews
• Narrative-driven Single-Player Action-adventure Game
E x p l o r i n g G a m e D e v e l o p m e n t a c r o s s D i v e r s e G e n r e s a n d b o t h S i n g l e - p l a y e r a n d M u l t i - p l a y e r
COLOPL NI Games

6. 2015 4Q 2016 1Q 2016 2Q 2016 3Q 2016 4Q 2017 1Q
Nov 2015
Release of “Slot Tub
Party”
Aug 2016
Team began
researching
Virtual Reality
technology and
games
Began
development of
Cyberpong VR
Feb 2016 Apr 2016
Released Cyberpong
VR for HTC Vive
Release of “Longbeard”
Oct 2016
Subsidiary of COLOPL -> Spinning Off -> Typical Silicon Valley Start-up
Closed $1M, and another 150K is on the way.(Total 4 investors)
Timeline
Approval from COLOPL
board on making VR games
Approval from COLOPL
board on “Spin Out”
Feb 2016 Aug 2016
Finding investors
Nov 2016
Spin off not working,
Quitting COLOPL
Jan 19 2017
Finding investors
Strting Subdream Studios

7. Subdream Studios, Inc.
Our Blubs,
"Subdream is social VR gaming studio located in San Mateo, CA, founded by serieal gaming entrepreneur
Jikhan Jung.
Team has released 3 VR games this year at COLOPL NI, ~100K downloads with meaningful revenue.
Subdream is going to figure out what best social gaming experience is in VR”

8. JIKHAN JUNG
CEO / Producer
MICHAEL LOPEZ
Sr. Engineer
FOUNDING TEAM
STAY IN TOUCH
jjung@subdreamstudios.com
1515 S El Camino Real, San Mateo, CA 94402
ABOUT US
Subdream Studios aiming to be biggest social VR Gaming Studio targeted for both VR Arcades and
Home market.
Core team @Subdream Studios was at COLOPL NI , US subsidiary of a leading Japanese Game
Developer and Publisher, COLOPL. In 2015, studio released 2 mobile titles, and 3 VR titles in 2016.
Cyberpong VR, Slot Tub Party, and The Rise of the Captain Longbeard.
Building on the success of its first three games, Subdream Studios will begin developing the
first ever platform for Social VR Gaming. The platform brings players together in a lobby where
they can challenge each other in 2-4 person multiplayer VR games. A simple PC interface can
be used to quickly set up matches, making it easy for VR Arcade operators to provide their
guests with the best experience.
#2
CyberpongVR is
nominate 2nd longest
played game per owner
Link
~100K downloads
mostly from High-end
VR
~ 90K Total Revenue
Jikhan is a serial entrepreneur, founder and ex-CEO of Gala-Net, first free-to-play gaming
platform gPotato in western market, successful M&A exit in 2013
Raising $2MM
7M Valuation Cap
20% Discount
SAFEE
Currently
$1.15M
Closed/Commited
Target closing date
March 2017
24 month run
Subdream Platform
V1.0 +
5 multiplayer VR
Games
Fukuta Kanji
Art Director
Khoi Le
Programmer / Social Media

9. Subdream Studios, Inc.
Status Owner Player Lapse time
Join Jikhan 2/4 1:04
Playing Guest 1 2/2 5:05
Spectate Jeff 2/4 2:05
Private Mike 1/2 1:07
Join Russ 1/4 0:20
Join Jen 1/4 1:02
C R E AT E NE W PL AY S I NG L E

10. 1. Introduction of Subdream Studios / Jikhan Jung
2. Experience to share
3. Database to share
Table of Contents

11. Can we raise?
Possibility that you can raise from the good investors
(1)Founder – Exit before (or anything relevant to be appealed)
90%
(2)Team – Experienced in VR(or anything relevant?)
8%
(2)Product – Hit in the market?
2%

12. What to raise?
SAFE Convertible Note Series A
Valuation Cap Valuation Cap Pre, Post Valuation
Discount Rate Discount Rate Max amount to raise
Term to Convert Liquidation preference
Interest rate Anti-dilution
Right of first offer
Co-Sales right
Drag-along
Board of Director
Founder Stock
Voting Right
SAFE > Convertible Note > Series A
SAFE is invented from the Y Combinator,
very simple, one form, only negotiate
Valuation Cap, Discount Rate

13. From whom to raise?
Why fundraise?
Capital(90%) + Alpha (10%)
Alpha : Next round(80%) , Network(15%), Advise(5%)
Capital :
VR is long way to go. 18+month run rate to be better.
Other way to go : Grants from HMD company, government project, work for hire, project financing,
Licensing contract, crowd funding.
Next Round :
Unless you have a big hit to sustain your growth, next thing is another fundraising.
(1) Possibility of leading next round (2) Exit experience

14. Any difference by country?
U.S. – Silicon Valley
: Unwillingness on investing in gaming(Hit Driven)
U.S. – Los Angeles
: Willingness on investing in gaming/Contents
Korea –
: No reply means no interest
: Even yes might not means yes until you close.
Japan –
: Clear on reaction : Yes means yes
: Pretty fast decision
China –
: VR interest is calming down

15. How to approach to investors
(1) Best if you have been building the relationship with them before your startup
DeNA, Genesia Ventures
(2) Intro of your successful entrepreneur friends
(3)Intro of other VCs (They know which VRs are looking)
Cognitive Investment
# Making them to approach to you!
Not a good idea
(1)Rely on your BD person(I closed 0 from my BD person’s network)
(2)Slow on response. (But, might be sometimes good to make them to wait for your decision, giving them
impression you are selective?)

16. Valuation?
Depend Founder(s) / Team / Games
No Game on the market yet (3~$7M Cap, Seed)
Game in the market, no hit yet(5~10M Cap, Seed)
Game hit(15M~ pre, Series A)

17. (1) Funding
Own DB of Investors
Keep on track…

18. 1. Introduction of Subdream Studios / Jikhan Jung
2. Experience to share
3. Database to share
Table of Contents

19. Silicon Valley!
19Except for the Techstar, Qualcomm
ventures, all in silicon Vallley

20. Middle 2016 was most hot and a bit slowing down?
Overall Number of investment slowing down?

21. (1) Funding
21
If you are small, accelerator first?
Silicon Valley
(1) HTC Vive X(SF, Busan, China, Taiwan etc):$100M.
: Typically invest ~$150K Convertible Note + ~6% common stock.
(2) BoostVC(San Mateo) : $6.6M
(3) Frontier Technology Ventures(San Francisco):$21.03M
: Used to be Rothenberg, River program, but…
China
Youzu: UCCVR : Shanghai
Japan
Gumi: Tokyo VR Startup : Tokyo
Korea
YJM : Seoul VR Startup : Seoul
Superventures : AR : $10M
VR Focused Investors - Accelerator

22. (1) Funding
1. COLOPL VR Fund(Tokyo based, investing global) : $100M
(FOVE, Nitero, VR base, Sliver, Owlchemy Labs etc)
: Shintaro, Yoda
2. The VR Fund(San Francisco based, investing mainly U.S.) : $50M
(Against Gravity, 8i, Immserv etc)
: Marco, Tipatat.
3. Presence Capital(San Francisco based, investing mainly U.S.) : $10M
(Baobab Studios, Uploadvr, etc)
: Amit
4. GREE VR Capital(San Francisco based, investing mainly U.S.) : $12M
(Vrchat, etc)
: Teppei
5. Metaverse VC(San Francisco based, investing mainly U.S.) : $4M
: Don
VR Focused Investors

23. (1) Funding
Asian Countries
Korea : Not much global efforts.
K Cube Ventures / YJM Games / KIP / Cognitive Investment / Altos
Japan : Very Active on global efforts.
COLOPL / Gumi / GREE / DeNA
China : A bit hard to invest to U.S.(any other countries too)
Youzu / Shunwang/ CRCM / legendary / Sparkland / West Summit Capital / Xyspace/Raine

24. Keep In Touch!
Subdream Studios Inc.
Jikhan Jung, Founder and CEO
jjung@subdreamstudios.com
+1 (408) 646-9806