The document summarizes key points from a presentation on game investments given by Sana N Choudary. It debunks myths about declining investment in gaming by showing that in 2012, game studios received a higher percentage of both number of investments and total dollar value compared to 2011. It also shows the average deal size for game studios was higher in 2012. The document advises that to raise funds, studios should focus on social proof like past exits or famous employees, or metrics like daily/monthly active users and average revenue per daily active user. It stresses the importance of understanding a startup's lifecycle and only pursuing investment at the right stage of validation, efficiency or scale.

1. 2012 Game Investments
Getting Past the BS about Game
Investments
Presented by:
Sana N Choudary
King of the Yetis
April 9, 2013

2. Agenda
• Where am I coming from?
• Should you be worried about investments?
• Myths debunked
• So what should you do

3. Where am I coming from?

4. Where am I coming from?
• Undergrad business focus on business strategy
• In house analyst old world businesses
• NYC’s first entrepreneur hub ULS —business model
coaching, navigating investment landscape
• Games since last 4 years--YetiZen
– 6500 developers at YetiZen events last year
– Over 700 startup applications per accelerator round (2) a year, 8
selected
– Large extensive investor network—peak at YetiZen’s board

5. Last night at YetiZen’s Road to
Success event

6. Should you be worried by what the media tells
you about gaming investment decline?

7. No!

8. Comparing Apples and Oranges
They count:
– Seed
– Kickstarter
– Follow-on venture rounds

9. Why no seed and Kickstarter?
• Individuals
• Mostly bet due to passion for game or team
• Momentum driven to some extent
• What works: build passionate followers in your vision. Ex
DoubleFine (12 year). Can take entire career

10. Why no follow-on venture rounds to
investments from prior years?
• Based on company achieving growth milestones
with Series A financing
• Indicates match between performance of prior
investments with follow-on investor expectations
• Bad indicator of investor appetite for games

11. So what should we look at?

12. First Venture Financing
• Definition--Counts first venture round plus second
round within same year only
• True apples to apples comparison
• Hypothesis driven
• Investor patterns in
– Traction
– Social Proof

13. Let’s debunk more BS—Truth gleaned
from 2012 Investments

14. BS Line #1: I only invest in picks and
shovels, dislike content risk

15. More Game Studios were invested in than
Platforms

16. BS #2: There are fewer green pastures
for game studios, more left for
platforms as gaming matures

17. What the numbers really show
Game Studios
% of Investments
100
90 74%
80
70 51%
60
50
40 23%
30
20
10
0
2011 2012

18. What the numbers really show
Game Studios
% Dollar Value of Investments
100
90
80
70
53%
60 45%
50
40 8%
30
20
10
0
2011 2012

19. What the numbers really show
Game Studios
Average Deal Size
$9.64
10
9
8
$6.79
7
US $ (Million)
6
5
4
3
2
1 $2.85
0
2011 2012

20. What the numbers show: a tricky
one. Partially right.
Game Studios
% of Investments % Dollar Value of Investments
74%
80 80
51% 53%
60 60 45%
40 40
23% 8%
20 20
0 0
2011 2012 2011 2012
Average Deal Size
$9.64
10
$6.79
US $ (Million)
8
6
4
2 $2.85
0
2011 2012

21. So what should you do?

22. So what should you do? If raising
1. If you have it Social Proof—past exits, c-level or
early employees of a famous
startup use it. May still not work.
2. If you do not have social
proof—focus on DAUs, ARPDAUs. Right level?
Genre dependent and moving target.

23. If you are considering raising
• Be clear on startup lifecycle and don’t waste time
with bad fits
Scale
Efficiency
Validation
Discovery

24. If you are at efficiency and scale and
considering raising
Arm yourself with the right
knowledge, mentorship, partnership deals, and way
to separate yourself from others with less traction or
self-awareness
Talk to us. Email me sana@yetizen.com

25. Thank you! Q&A
If you want to connect with me
• http://yetizen.com/blog/
• Twitter: @SanaOnGames
• info@yetizen.com