1) Pollen VC provides flexible lines of credit to game developers to fund user acquisition spending and help grow their business without giving up equity. 2) For hyper casual game studios, working with a publisher may be better if they need expertise in user acquisition or monetization and don't have capital to spend on user acquisition themselves. Self-publishing works better for experienced hyper casual studios with expertise and some capital. 3) It's important to focus on return on ad spend (ROAS) and model the lifetime value (LTV) of players over time to understand when user acquisition spending reaches the optimal point for profitability.

1. Funding & Growing Your Hyper Casual Studio Without a Publisher
27th May 202
1
Martin Macmillan - CEO

2. About Pollen VC
Now!
2
We provide lines of credit to developers which enable
them to fund their business better and grow using paid
UA
Our model is a
fl
exible and non-dilutive alternative to
equity
fi
nancing, allowing developers to retain control
while growing their business
Our mission is to get start-ups to think about capital
ef
fi
ciency, using the right type of funding for the right
purpose

3. Publisher or Self-Publish?
3
Making the right decision for your studio

4. When to work with a publisher vs self-publish
Now!
4
Publisher
Need UA expertis
e
Need monetization expertis
e
Do not have capital to front
sustained UA spend required to
scale to top of the chart
s
Self Publish
Have UA expertis
e
Have monetization expertis
e
Have SOME capital to start to scale U
A
Well suited for 2nd time HC studio
s

5. Think of UA as an investment proposition
5
$0.20 invested
results in $0.30 of LTV
after 30 days

6. Install velocity is critical

7. Focus on ROAS
Now!
7
US$0.00
US$0.10
US$0.20
US$0.30
US$0.40
US$0.50
1 3 5 7 9 11 13 15 17 19 21
Breakeven
100%
ROAS
LTV Cut-off
$0.30
50%
ROAS
125%
ROAS

8. Pollen VC – CFO Resources
8
https://pollen.vc/cfo-resources/

9. Payments & Credit Lines
9
Optimizing for success

10. How credit lines work

11. Figure out ROAS breakeven day
Now!
US$0.00
US$0.10
US$0.20
US$0.30
US$0.40
US$0.50
1 3 5 7 9 11 13 15 17 19 21
Breakeven
100%
ROAS
LTV Cut-off
$0.30
50%
ROAS
125%
ROAS

12. Calculating Average Payables Days

13. LTV cycle of game does not match payment terms of
ad network. Let’s
fi
rst look at P&L

14. Now look at cash…

15. AR based credit can be used to boost credit lines
from ad networks so you can keep spending

16. Importance of payment terms in your planning
UA is capital intensive for hyper casual success
If you choose to self-publish you either need
a huge war chest
AR based credit facilities to scale

17. Rethinking The
Monetization Stack
17
It’s not just CPM that matters…

18. Are you too focused on headline CPM rates in
deciding your waterfall?
Now!
18
Think about time value of mone
y
Consider ad network payout delay versus your reinvestment horizon
s
x% better CPMs with long payment delays could be a massive false
economy when you consider bigger pictur
e
Think about adjusting your stack based on closer analysis of payment terms

19. The UA Machine
19
Looking at UA from a
fi
nance perspective

20. Three Fundamental Questions
20
Do I have a machine?
1.
How do I fund the
machine?
2.
How do I know when
my machine is running
at full capacity?
3.

21. Most Expensive $
Least Expensive $
Exhaust the least expensive
bucket before moving onto
the next one
The Capital Stack
Now!
21
Credit Line from Ad Network
Cash at Bank (eg from free cashflow of an existing app)
Credit Cards
Lines of Credit eg against accounts receivable (AR)
VC Funding

22. Factor in the cost of
fi
nancing
ROAS ROI
50%
Financing 2%
PROFIT
48%
Break out ROI to a
monthly return
Apply
fi
nancing cost on
the same basis
Focus on PROFIT!!!
3.
1.
2.

23. How to know when
your machine is running
at full capacity

24. Now!
24
CPI
Acquisition costs rise over time
Now!
Installs
$
Demand & Supply characteristics of UA

25. Now!
25
LTV
CPI
Now!
Installs
$
Acquisition costs rise over time
LTV falls as you scale
Demand & Supply characteristics of UA

26. Now!
26
LTV
CPI
Acquisition costs rise over time
LTV falls as you scale
Model the shape of your curve
Keep buying until min ROI target achieved, eg
X% margi
n
Each game genre has different characteristic
s
Feed this into your overall strategy of the games
you are building for target audience
Now!
Installs
$
Demand & Supply characteristics of UA

27. Now!
27

28. Finance and UA team interaction
Take time to interact
and learn each other’s
viewpoint
1.
Forget about the
concept of the
marketing budget
2.
Work together to
maximise the UA
opportunity for as long
as it exists and focus on
pro
fi
tability
3.

29. Thanks!
martin@pollen.vc