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Funding & Growing Your Hyper Casual Studio Without a Publisher


27th May 202
1

Martin Macmillan - CEO
About Pollen VC
Now!
2
We provide lines of credit to developers which enable
them to fund their business better and grow u...
Publisher or Self-Publish?
3
Making the right decision for your studio
When to work with a publisher vs self-publish
Now!
4
Publisher
Need UA expertis
e

Need monetization expertis
e

Do not ha...
Think of UA as an investment proposition
5
$0.20 invested


results in $0.30 of LTV


after 30 days
Install velocity is critical
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
L...
Pollen VC – CFO Resources
8
https://pollen.vc/cfo-resources/
Payments & Credit Lines
9
Optimizing for success
How credit lines work
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

...
Calculating Average Payables Days
LTV cycle of game does not match payment terms of
ad network. Let’s
fi
rst look at P&L
Now look at cash…
AR based credit can be used to boost credit lines
from ad networks so you can keep spending
Importance of payment terms in your planning
UA is capital intensive for hyper casual success


If you choose to self-publ...
Rethinking The
Monetization Stack
17
It’s not just CPM that matters…
Are you too focused on headline CPM rates in


deciding your waterfall?
Now!
18
Think about time value of mone
y

Consider...
The UA Machine
19
Looking at UA from a
fi
nance perspective
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 runn...
Most Expensive $
Least Expensive $
Exhaust the least expensive
bucket before moving onto
the next one
The Capital Stack
No...
Factor in the cost of
fi
nancing
ROAS ROI
50%
Financing 2%
PROFIT


48%
Break out ROI to a
monthly return
Apply
fi
nancing...
How to know when
your machine is running
at full capacity
Now!
24
CPI
Acquisition costs rise over time


Now!
Installs
$
Demand & Supply characteristics of UA
Now!
25
LTV
CPI
Now!
Installs
$
Acquisition costs rise over time


LTV falls as you scale
Demand & Supply characteristics ...
Now!
26
LTV
CPI
Acquisition costs rise over time


LTV falls as you scale


Model the shape of your curve


Keep buying un...
Now!
27
Finance and UA team interaction
Take time to interact
and learn each other’s
viewpoint
1.
Forget about the
concept of the
...
Thanks!


martin@pollen.vc
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Slides from Martin's presentation on 'Funding & Growing Your Hyper Casual Studio Without a Publisher'

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Pollen VC Slides - Hyper Games Conference 2021

  1. 1. Funding & Growing Your Hyper Casual Studio Without a Publisher 27th May 202 1 Martin Macmillan - CEO
  2. 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. 3. Publisher or Self-Publish? 3 Making the right decision for your studio
  4. 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. 5. Think of UA as an investment proposition 5 $0.20 invested results in $0.30 of LTV after 30 days
  6. 6. Install velocity is critical
  7. 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. 8. Pollen VC – CFO Resources 8 https://pollen.vc/cfo-resources/
  9. 9. Payments & Credit Lines 9 Optimizing for success
  10. 10. How credit lines work
  11. 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. 12. Calculating Average Payables Days
  13. 13. LTV cycle of game does not match payment terms of ad network. Let’s fi rst look at P&L
  14. 14. Now look at cash…
  15. 15. AR based credit can be used to boost credit lines from ad networks so you can keep spending
  16. 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. 17. Rethinking The Monetization Stack 17 It’s not just CPM that matters…
  18. 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. 19. The UA Machine 19 Looking at UA from a fi nance perspective
  20. 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. 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. 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. 23. How to know when your machine is running at full capacity
  24. 24. Now! 24 CPI Acquisition costs rise over time Now! Installs $ Demand & Supply characteristics of UA
  25. 25. Now! 25 LTV CPI Now! Installs $ Acquisition costs rise over time LTV falls as you scale Demand & Supply characteristics of UA
  26. 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. 27. Now! 27
  28. 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. 29. Thanks! martin@pollen.vc
  • JupitaraNath

    Jul. 16, 2021
  • MervynChua2

    May. 28, 2021

Slides from Martin's presentation on 'Funding & Growing Your Hyper Casual Studio Without a Publisher'

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