Delivered at Casual Connect Europe 2017. In this session, attendees will learn how to construct their studio and games to maximize income and attractiveness to investors and acquirers. We'll also discuss techniques to streamline operations and management. You'll discover ways to keep your studio and properties in the public eye without spending money. Finally, we'll discuss how to approach potential investors and acquirers.

1. Focusing on Value
Building a Valuable Studio and Franchise
James Kosta
Operating Partner
Signia Venture Partners

2. Make ‘Value’ Part Of Your Startup Plan
• Focus
• Is the Company going to be tech, IP or consumer focused?
• Trim the ‘fat’.
• Build vs. Buy: Does it add value?

3. Make ‘Growth’ Part Of Your Startup Plan
Human Resources
• Do Founders know how to hire and delegate?
• Is Employees’ work product legally owned?
• Flat org charts feel great, but can’t scale.

4. Make ‘Exiting’ Part Of Your Startup Plan
Paid-In Capital
• Are Founders ‘investing’ in the company with money or time?
• Did Founders bring equipment or IP into the Company?
• Does the Company truly own everything?

5. Why Are Some Studios Worth So Much?
• Users are your single greatest asset.
• Understanding them multiplies value.
• Sell pre-launch = lower risk.
• Sell post-launch = Better have TRACTION!

6. Creating a ‘buzz’
• Start early. Identify your fanbase and focus.
• Not every great idea is a great idea.
• Be careful catering to discontent.
• Recruit notable advisors early! Use them!

7. How Studio Valuations Are Calculated
(LTV * # Users) + (20% * Payroll/yr) + (X Factor)
X Factor can be:
• IP value
• Acceleration of development
• Opportunity cost
• Value to competitor

8. Attracting Investment Capital and Partners
Partners:
• How much are your users worth at your competitors’ LTV?
• How attractive would your IP be to competitors’ in-network users?
• What tech have you developed that can enhance a competitors’ LTV?
Your LTV
$
Your
Marketing
Your IP
Their LTV
$$$
Their
Marketing
Your IP

9. Attracting Investment Capital and Partners
Investors:
• Focus shows in hiring, operations and community management.
• Depth of Board
• Fair valuation
• LTV has been optimized
• Can it scale?

10. Evaluating an Offer
Use a third-party advocate/consultant to assist and advise.
• Can say things you can’t.
• Should be connected into the M&A community.
• Plausible deniability

11. Evaluating an Offer
Tips:
• Don’t over-negotiate or negotiate by red-line.
• Use the phone or meet in person.
• Despite rumors: Investors and Partners don’t want to beat you down.

12. Win-Win FTW
• Retention
• Holdbacks
• Earn-outs
• Control of IP Litigation
• Indemnity

13. Barriers to Execution
• Invention Disclosure/Ownership
• Open-Source Licenses
• Retention
• Potential Litigation

14. Summing It All Up
Build your company in a way that makes sense.
Start with the mega-scale. Work backwards.
Spend time on your HR documents. Be reasonable but firm.
Get to know your competitors. Take comfort in your shared challenges.
Don’t build a xenophobic/nepotistic Board.
Set milestones and HIT THEM! Publish them to create urgency.
Check your ego when negotiating. No one owes you anything.