@ GDC: Indie Game Studios Can Still Attract Early Stage Funding
This story was written by Tameka Kee.
Just in case the VC-hungry attendees to the investment-focused panel at GDC weren't sure, moderator Matthew Le Merle laid it out from the start: "You couldn't have chosen a worse year to be looking for startup funding." Le Merle, whose company Gameplay Holdings advises and invests in game-based startups, ran down the list of financial constraints currently plaguing all levels of investors, from angel investors and VCs, to holding companies and even friends and family. But he did offer some advice for indie developers or creative teams that hoped to attract what little capital that was left out there:
Hit up friends and family first: Le Merle called it "love money," saying it was a leading indicator of whether the developer or team was deserving of funding from outside sources. "If you're not ready to pitch your grandmother, you're not ready to pitch an investor." He said it was important for cash-seekers to come to the table with at least $100,000 that they'd raised on their own to be more appealing to potential angelsbut also to retain more of their company in the long run. More after the jump.
Get a dedicated pitch-person: Fund-raising is a full-time job, and developers need one person to handle it so that they can focus on production. "Most people that are creatively gifted aren't good at fund-raising and the whole idea of being organized sucks the wind out of what they're trying to do," he said.
But don't waste time pitching VCs: Le Merle said developers should stick to angels, since most VCs are bogged down by existing investments that are already in jeopardy. "Very few VCs are investing in games, and if they are, they're avoiding seed or start-up rounds," he said. "You'll waste valuable time approaching the wrong VC." He added that angels thrived on helping new entrepreneurs because the newbies "remind us of ourselves."
Photo Credit: Kytographer
By Tameka Kee