The document discusses different types of funding sources for startups, known as "the devils". It describes publishers, friends and family, angel investors, seed investors, venture capitalists, agencies, incubators, and accelerators. For each, it outlines what they provide, what they receive in return, what the founder gives up, and potential downsides. The document advises founders to pursue investors if they want a scalable business or publishers for a lifestyle business. It offers the accelerator program as a potential source of funding, mentorship, and business development deals.

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Japheth Dillman
Funding your Startup:
Dating the DEVIL!

2. Who is Japheth Dillman?
• Began
Programming
and
making
games
at
the
tender
age
of
10
• Reached
over
500+
million
users
with
my
games
• Created
games
for
nearly
every
online
and
mobile
plaMorm
• MulNple
Ntles
on
iOS
with
5-­‐10
million
users
each
Most
notorious
for:
CoFounder
of
Ye,Zen
• World’s
first
and
only
game
industry
accelerator
• World’s
largest
community
of
game
developers

3. Sample of brands I have touched in a Gamey way

4. Ok, What devils exist? Who can help me?
Publishers, Friends and Family round, Angel
Investors, Seed Investors, VC funding,
Agencies, Incubators, Accelerators, Brokers,
ugh… WTF?
Let’s unravel
this mess!

5. Components of the
Devil’s Contract

6. 1. What they give you
2. What they get from you
3. What you give up
4. How you’re screwed!
Time Pending:
• Examples
• Your Stories
• How to find them
The details of the contract

7. The Devils

8. 1. What they give you:
• Funding (maybe)
• Marketing/Distribution (usually)
• Creative Guidance (loads of experience), tools,
technology, branding (sometimes)
2. What they get from you
• Revenue! 20% - 80%
3. What you give up
• Creative Control, IP (sometimes), possibility to get
investors (wait till end please)
4. How you’re screwed!
• Did you see #3? What about #2???
Publishers

9. 1. What they give you:
• A tiny bit of money ($5k - $25k)
• Sometimes a family lawyer
2. What they get from you
• Not much. A bit of equity.
3. What you give up
• Not much! Maybe some awkward family reunions.
4. How you’re screwed!
• Does VC McJohnson want to see your uncle on the
board??? Do they want “non-active” people on the
cap table?
Friends and Family

10. 1. What they give you:
• Bigger amount of cash towards product release
($50k - $1mil)
• Connections (insanely valuable)
2. What they get from you
• Equity (convertible note vs. stock)
3. What you give up
• Creative Control (depending on how active), board
seat (sometimes), often they suck your time
(personal passion projects)
4. How you’re screwed!
• Not much downside, unless you don’t use a
convertible note!
Angel Investors
(typically pre-product)

11. 1. What they give you:
• Bigger cash injection for accelerated growth used
for marketing & UA ($500k - $2mil)
• Possibility to participate in later rounds (more $$$)
• Distribution Channels, UA, Marketing: leads
2. What they get from you
• Equity (convertible note vs. stock, USUALLY stock)
3. What you give up
• Board Seat
• 20% (typical, b/c in CA this gets you a board seat)
4. How you’re screwed!
• Less involved than angels (not passion projects)
Seed Investors

12. 1. What they give you:
• BIG cash: for accelerated growth in market AND of
company… ie: hiring ($1.5 mil - $100’s mil)
• Possibility to participate in later rounds (more $$$)
• Distribution Channels, UA, Marketing: leads
2. What they get from you
• Equity (straight stock WITH better preferences:
NOT COMMON)
3. What you give up
• Board Seat
• 20% - 30% Equity (often less at later rounds)
4. How you’re screwed!
• Loss of control (eventually, maybe, sometimes)
• Loss of Equity
Venture Capitalists

13. 1. What they give you:
• Publisher deals/contacts (generally not
investors, just publishers)
2. What they get from you
• Revenue Share! 2% - 15%
3. What you give up
• More money beyond the publisher take
4. How you’re screwed!
• Well, go back to #3
Agencies

14. 1. What they give you:
• A bit of cash (usually $5k-$10k per founder head)
• Office space, computers, equipment
• Connections to Seed/Angel investors
• Generic business mentors (usually not industry
specific, tech or investment generic)
2. What they get from you
• Equity (usually straight equity, 5% - 20%)
3. What you give up
• Larger bit of Equity early on
4. How you’re screwed!
• Are you sure you need this tiny bit of cash, services,
and connections? Can you bootstrap and save your
precious equity?
Incubator (pre-product)

15. 1. What they give you:
• A larger bit of cash (sometimes)
• Office space (sometimes)
• Connections to VC/Seed/Angel investors, and pitch
mentoring
• LOADS of Industry specific mentors (150 @ YZ)
2. What they get from you
• Equity (usually straight equity, 3% - 10%)
3. What you give up
• A bit of Equity early on (typically less than
incubators because company is further along)
4. How you’re screwed!
• Did you need the VC connections? The Industry
mentors? The pitch mentoring? Etc…
Accelerator (post-release)

16. 1. What they give you:
• Connections to VC/Seed/Angel investors
• Pitch mentoring (sometimes, usually not)
2. What they get from you
• Percentage of the close (5% - 10% is standard)
3. What you give up
• A good chunk of the capital you just raised
4. How you’re screwed!
• Did you need the VC connections? The pitch
mentoring?
• Will this PISS OFF your VCs? Will it stop a deal
if they aren’t familiar with the broker?
• Can you afford this large loss of cash?
Brokers

17. Will the REAL Devil
please stand up?

18. What type of a studio are you?
Ultimate it comes down to:
• Lifestyle Business
vs.
• Scalable Business
Hold on… it’s not that easy

19. LifeStyle Business: You PURELY want to
pursue your passion.
• You care not about making millions (M&A,
Exit, etc)
• You want to play it safe
• You’re not here to make a “business”
Scalable Startup: You want to make a big,
thriving business, possibly exit (maybe not, see
Riot Games), and all while doing your passion.
Ok… define me in a nutshell

20. LifeStyle Business à Publisher
Scalable Startup à Investor
What you CAN do: Get an investor, and later go
publishing.
What you CAN’T do: Get a publisher, and later
go investment route.
So who do I pursue?

21. Examples & Your
Stories

22. Ok J… wrap it up
buddy

23. Developer:
• You need help with Strategy, fund raising, mentorship
• You’re interested in our accelerator program
(investment, mentorship, biz dev deals, etc)
Investor:
• Need help navigating the mobile/gaming space?
Extra time:
Convertible notes
Riot Games
See Me if…

24. Thank you!
Japheth Dillman
CCO & Co-Founder
jdillman@yetizen.com
Questions