1. Fundraising for Game Studios

2. Agenda Funding Sources for Game Development The Angel/VC appetite for Game Investing Recent VC Activity in Games –Active VC Investors –VC Investment by Game Type What attracts VCs? Tips on how to approach VCs

3. What funding sources exist for game development? Project/Title financing –Game Publishers –Media Companies Equity Investors –Angels –VC/Private Equity Alternative Financing –Government/Military –Foreign licensing Equity investors are increasingly looking at the video game sector as it remains one of the few verticals in media & entertainment that continues to grow in the down economy

4. What is the VC appetite for game investing? Institutional investing not historically focused on gaming Funding in the sector is growing* –2008: 112 companies raised $935MM, up from $613MM in 2007 2008 financings* –4 > $50MM –6 between $20MM and $50MM –16 between $10MM and $20MM –86 < $10MM Strong early stage focus on Virtual worlds, Casual MMOs, Social games and Casual games (recent increase in Mobile) * “Game and virtual world fundings reach $936.8 million in 2008”, VentureBeat, http://games.venturebeat.com/2009/04/26/second-revision-game- and-virtual-world-fundings-reach-935-million-in-2008/http://games.venturebeat.com/2009/04/26/second-revision-game- and-virtual-world-fundings-reach-935-million-in-2008/

5. Active VC Investors in Games * Investments made since 2007

6. VC Game Investments by Type * “Virtual worlds & social games investments defy downturn in October 2008, peak in July 2008”, Jussi Lakkonen’s Blog, http://jussilaakkonen.wordpress.com/2008/11/18/virtual-worlds-social-games-investments-defy-downturn-in-october-2008-peak-in-july-2008/ http://jussilaakkonen.wordpress.com/2008/11/18/virtual-worlds-social-games-investments-defy-downturn-in-october-2008-peak-in-july-2008/

7. What attracts VCs? Traditional game studios are generally not attractive to VCs –Games come with big budgets and long development cycles –Content is “hit-driven” with a binary outcome Many VC’s are uncomfortable investing in content –Prefer to invest in platforms, disruptive technologies or middleware So why is gaming relevant to VCs now? –Content can be cheaper and faster to develop –Distribution is freed from traditional retail model, is now open via digital channels through new platforms like social networks and mobile application platforms –Video games are now appealing to a much broader demographic; more people are playing games than ever before

8. Approaching VCs – a few tips Have your plan/pitch clear and crystallized, especially: –What’s the big idea? –Who will make it happen? –How will it make money? Have a tight elevator pitch, an executive summary, and a presentation –Great resources: Sequoia’s Capital’s “Writing a Business Plan” Dave McClures’ “How to Pitch a VC”

9. Approaching VCs – a few tips Identify targets in advance (potential investors) –Pay attention to VC/financing press (Venturebeat/TechCrunch etc) –Research venture funds with experience investing in games Identify partners with specific board experience Many VCs have public bios, speaker presence, blog presence, twitter Go through existing network to find direct or indirect route to key partner –Best if you know someone who directly knows the partner –Otherwise, look for ways to connect with a CEO of a company that partner is a board member of Line up a roadshow and go!

10. Brandon Beck bbeck@riotgames.com Useful Links: Venture News Venturebeat.com Techcrunch.com Venture Tips/Resources Venture Hacks - http://venturehacks.com/archiveshttp://venturehacks.com/archives Ask the VC - http://www.askthevc.com/blog/index.phphttp://www.askthevc.com/blog/index.php The Lean Startup - http://www.slideshare.net/venturehacks/the-lean-startup-2http://www.slideshare.net/venturehacks/the-lean-startup-2 Writing Business Plans / Pitching: Sequoia Capital’s Writing a Business Plan - http://www.sequoiacap.com/ideashttp://www.sequoiacap.com/ideas Dave McClure’s How to Pitch a VC - http://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka- startup-viagra-how-to-give-a-vc-a-hardonhttp://www.slideshare.net/dmc500hats/how-to-pitch-a-vc-aka- startup-viagra-how-to-give-a-vc-a-hardon David Cowen’s How to NOT Write A Business Plan - http://whohastimeforthis.blogspot.com/2005/11/how-to-not-write-business-plan.html http://whohastimeforthis.blogspot.com/2005/11/how-to-not-write-business-plan.html