Gaming & Financing

Mårten Janson, Fondia Oy, 6.11.2013 Turku Sience Park

Agenda

Wake up!

Who you gonna call?

Gaming Issues

2

Wake up!

3

Interesting? Yes!

•Fastest growing sector of the global entertainment, value 65 billion $ (2011)

•Fastest growing sector of the Finnishcreative economy

•Finnish turnover 800 m, 200 companies

•Remedy, Sulake, Rovio, Supercell…

4

What happened?

•Mobility changed the (console) game

•#1 free app > 100.000 dls/day in US

•Appr 1.000 iOS apps launched every day

•Digital distribution & analytics

•What’s the cost of an app?

•New normal eligible for seed and venture

5

Probably a Loss

•Extremely fierce competition

•Average income / app about 8kEUR

•Most games fail and do not make money

•Educate and sell your case

•Understand and invest in understanding

•Skills, expertise, patience and luck

6

Who you gonna call?

7

What do you need?

•I need money, well…

•How much? Calculations!

•Why? Purpose and calculations!

•Grants, debt, FFF, angels, VC, CapM…

•Different players have different products

8

Some sources

•Incubators/Gamefounders

•TEKES

•Angels (FIBAN, Industry angels)

•Finnish seed and venture funds (VIGO)

•Crowdfinancing (Invesdor, Vauraus, Indiegogo, Kickstarter…

•Varma, Ilmarinen, Tapiola, Fennia, Etera…9

A gaming source

•Publishers!

•Upfront payments and revshare

•CBC decided, choose strategy

•Watch out for broad exclusivity, channels, sequels etc.

•How is the revshare calculated?

10

Benefits of equity

•Strengthens equity and solidity

•No direct cash flow requirements

•No security or collateral

•Cash, development, networks

•Align your interests

11

Prepared?

•Business idea & plan, monetatization

•Team and key persons

•Advisors

•Timetable and cash

•Plan B?

12

Really prepared?

Investment readiness =

Shareholder readiness +

Business readiness +

Corporate readiness

13

Prepared for Gaming?

14

Gaming issues (1)

•High project risk – strategy to market?

•Project phase determines risk

•Dev, launches, marketing & acquisition

•Gaming or game company

•Separate IP company

•Clear Exit strategy?

15

Gaming issues (2)

•High level strategy and positioning

•Game vs. trademark (Angry Birds)

•Track record and team (back to the 90’s?)

•Budget all costs until break-even

•CPU vs. LTR

16

Key Terms in Gaming

•Team – working obligation and vesting

•Risk – tricky valuation, use tranches and milestones (TEKES, risk positioning)

•IP – all rights vested in the Company

•Exit – investor driven

•Business Plan – strategically important

17

Baldly go…

1. Understand and embrace risk

2. Your strategy defines everything

3. Utilize experience, know-how, partners

4. Call TEKES, call FIBAN, use networks…

5. Call Fondia

18

Fondia ?

19

Fondia as Partner

•Fastest growing service provider

•Genuine insight in gaming industry and transaction services

•Offices in Finland, Sweden and Estonia

•FIBAN partner

•FVCA member

20

Fondia’s Services

•www.virtuaalilakimies.fi (tool)

•Sähköinen sopimusarkisto (readiness)

•Lakiosastopalvelu (readiness)

•Sähköinen datahuonepalvelu (project tool)

•Sähköinen hallitustyöskentelytila (tool)

•Rahoitusjuristit ja kontaktiverkosto (project)

21

Gaming Specifics

•www.fondia.fi/gaming

•Pelifirman lakituki EUR 150/kk

•28 Nov in Helsinki: User acquisition

22

Thank you!

Mårten Janson

marten.janson@fondia.fi

+358-20-7205 404

23