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Presented by:
Sana N ChoudaryKing of the Yetis
April 9, 2013
2012 Game InvestmentsGetting Past the BS about Game
Investments
Agenda
• Where am I coming from?• Should you be worried about investments?• Myths debunked• So what should you do
Where am I coming from?
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
Last night at YetiZen’s Road to Success event
Should you be worried by what the media tells you about gaming investment decline?
No!
Comparing Apples and Oranges
They count:– Seed–Kickstarter– Follow-on venture rounds
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
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
So what should we look at?
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
Let’s debunk more BS—Truth gleaned from 2012 Investments
BS Line #1: I only invest in picks and shovels, dislike content risk
More Game Studios were invested in than Platforms
BS #2: There are fewer green pastures for game studios, more left for platforms as gaming matures
What the numbers really show
2011 20120
10
20
30
40
50
60
70
80
90
100 74%
51%
% of Investments% Dollar Value of Investments
Game Studios
23%
What the numbers really show
2011 20120
10
20
30
40
50
60
70
80
90
100
53% 45%
% Dollar Value of InvestmentsGame Studios
8%
What the numbers really show
% of Investments
2011 20120
1
2
3
4
5
6
7
8
9
10
$6.79
$9.64Average Deal Size
US
$ (M
illio
n)Game Studios
$2.85
2011 20120
20
40
60
8074%
51%
% of Investments
2011 20120
20
40
60
8053%
45%
% Dollar Value of Investments
2011 20120
2
4
6
8
10$6.79
$9.64Average Deal Size
US
$ (M
illio
n)
What the numbers show: a tricky one. Partially right.
Game Studios
23% 8%
$2.85
So what should you do?
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.
If you are considering raising• Be clear on startup lifecycle and don’t waste time
with bad fits
Discovery
Validation
Efficiency
Scale
Seed and Angel
Venture
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 [email protected]
Thank you! Q&AIf you want to connect with me• http://yetizen.com/blog/• Twitter: @SanaOnGames• [email protected]
