Keynote from GMIC 22 Oct 2013 covering the pros and cons of different forms of funding mobile games.

1. FUNDING THE
FUTURE OF MOBILE GAMES
Kristian Segerstrale
Co-founder, Initial Capital
@ksegerstrale
kristian@initialcapital.com

2. QUICK INTRO
2001-2007
MOBILE GAMES
CO-FOUNDER, VP
MACROSPACE
($320M IPO)
2007-2012
2011-2013
SOCIAL GAMES
CO-FOUNDER, CEO
($400M SALE TO EA)
EXEC VICE PRESIDENT,
DIGITAL
( DISC TO DIGITAL )
2010-
LP / CO-FOUNDER
INVESTOR / ACCELERATOR
(SUPERCELL, SWRVE ETC)

3. STATE OF MOBILE PLAY
2012
•
•
•
•
Million dollar games
Fragmented companies
Dev budgets in $$ k
Performance marketing
• No publishing leverage
• Category opportunities
• Evolving discovery
2014
•
•
•
•
Billion dollar games
Global powerhouses
Dev budgets in $$ MM
Broad media mix
• No publishing leverage
• Category opportunities
• Evolving discovery

4. 1BN MOBILE DEVICES SOLD IN 2013
Source: BI Intelligence

5. MOBILE DATA IS EATING THE WEB
Credit: Mary Meeker 2013

6. TABLETS OUTSELLING LAPTOPS
Credit: Mary Meeker 2013

7. EVERYONE IS SHARING EVERYTHING
Credit: Mary Meeker 2013

8. GLOBALIZATION OF DEMAND
Source: Mary Meeker 2013

9. SO THE FUTURE IS AWESOME!

10. BUT HOW DO I FUND
GETTING THERE?

11. GETTING FUNDING
IS A
RECRUITMENT EXERCISE

12. THREE TYPES OF FUNDING
Publisher
Financing
Seed
Investment
…
+ Self financing & crowd funding
…
Strategic
Investment
…

13. PUBLISHER FINANCING
Publisher finances, advises on development, handles marketing
•
•
•
•
•
•
•
RIGHT IF:
Access to marketing and monetization expertise
Access to technology and data
Access to cross promotion networks
Marketing execution
You give up the majority of ability to invest in your business
You give up all intellectual property
You give up any chance to scale independently
•
•
You want a lifestyle business making games
You can’t get funding from elsewhere

14. SEED INVESTMENT
Investors buy 15% - 30% of your company for $300k - $2M
•
•
•
•
•
•
•
RIGHT IF:
Access to broad expertise from product / marketing to M&A
Partner to look out for you as shareholders
Assistance in company growth, further financing, channels
You keep and re-invest all revenue / profits
You dilute your shareholding by 15-30%
You create governance around you (Board etc)
You agree that it’s important for shareholders to have a return
•
•
You want to build something really big and change the world
You want to realize the value of your shares one day

15. STRATEGIC INVESTMENT
Industry actor buys a share of your company at any stage
•
•
•
•
•
•
•
RIGHT IF:
Access to industry expertise from product to marketing
Access to channels to market, technology, data
Assistance in company growth
You keep and re-invest all revenue / profits
You dilute your shareholding
You create governance around you (Board etc).
You create a potential misalignment for further financing
•
•
You want to build a business that scales to be really big
You are comfortable potentially giving up financing options

16. WHAT WE LOOK FOR @ INITIAL CAPITAL
1. Talent
team and what you’ve made together
2. Creative first
vision and passion for a style of game
3. Market awareness healthy push and pull inside of team
4. Chemistry
would we join this company
5. Location
san francisco, london, finland

17. FINAL PIECE OF ADVICE
MAKE THIS
HIGH RISK
ZONE
What you love to
play and make
DISASTER
ZONE
What you think the
market will love

18. THANK YOU!
Kristian Segerstrale
Co-founder, Initial Capital
@ksegerstrale
kristian@initialcapital.com