Go talk with Andrews & Kurth (law firm) in downtown Austin, I believe on 2nd street. They do a lot of work for all the local VC shops, including Austin Ventures and their smaller peers. They are not cheap, but they are the best in the business in that area. VC money, or possibly angel investors, is what you are looking for. They don't fork over money without big strings attached... expect to give up more than 30% of the biz, expect all kinds of negative controls and restrictions on your corporate actions, expect them to have a majority on the board, expect management fees, the whole 9 yards.
Are you creating an open source gaming company? Or do you guys provide a service for a fee? Or are you more of just a portal, like kongregate.com? I'm just trying to conceptualize where this six million dollars is going.
TJ, What would they do exactly set up contacts? I have already incorporated, what else would the lawyers do? Introductions? DD
We are creating the games, and having the audience particpate in the process, then we release the Modification tools, and let the end users build map packs and modify the games, they would then submit it to our company for quality control checks and we would allow them to sell their versions on our site, we would take a 30% hosting fee, and the modders would get 70% or the revenue. We have a casual game coming out every 8-9 months (zuma, bejewled, Fate types of game) and a premier title every 18-24 months (AAA) title like Conquest Frontier Wars etc. The industry has shifted away from the PC market and has focused on console products causing the PC market to be underserved. And since we will be selling primarily online and dealing in Bits and bytes, our packaged goods costs are nil....so when we sell our products below what you would normally pay in a WalMart etc, we still make money because we recoup almost all of the revenue less the cost of hosting and bandwidth etc. So, instead of our break even for a $2 Million dollar game being in the hundreds of thousands of units sold (before adding in marketing and sales costs etc) our break even would be around 50k units sold. And our audience is global, not just limited to shelf space at Best Buy etc. DD
I have a few contacts with Texas Ventures and they deal with a lot of venture capitalists. I'm actually going down to Austin in a few weeks to talk to a venture capital company. I know you were involved in some gizmondo project a few years back. Anyway, here is what I think you should do. Sell a percentage of your company or future earnings to a venture capital firm, but in the terms state that they will not have any authority over how you run the business. As your company get bigger, you'll get more investors and maybe get bought out. I'm just not sure if you can get $6 million. One of my business partner's has a site that just launched called "wecluck.com". He got $500,000 for 2.5% of the company + 2.5% in future equity. Like SWT said, if a deal goes through, I'll definitely require a small percentage. My email is guoyu2222@gmail.com. Contact me if you're interested.
Beyond introductions there is a lot of lawyering still to go on if you're selling stock in a company. here's a fun website for you, too: www.thefunded.com http://www.vgvc.net/ http://www.gameinvestors.com/ http://stuckincustoms.com/2007/05/10/recent-venture-capital-deals-in-the-games-industry/ there's a lot of info out there. may also want to think about hiring a banker to help you raise the money...just a thought. EDIT: A lot of people (see above) are throwing out some crazy valuation numbers. If you can get that, by all means go that rout. That would obviously lean more towards angel capital, but there are strong networks of those throughout Texas for you to approach. http://www.centexangels.org/ www.houstonangelnetwork.org etc
Make a p*rn videogame. If not then give us the option to create it when your company gets started. signed Tracy Jordan
I'll buy some shares. I'm not close to being able to hit 7 figures though. I don't play many games (at least since college, when Missile Command was king), but when I have, there's always stuff that I want to see more of or things I want it to do that it didn't... I definitely see the appeal.
Apologies to the others in advance, but you are getting a lot of terrible advice in this thread. Our firm represents a ton of gaming and digital media startups in Silicon Valley, and VCs here are all chasing video game companies big time. $6M is not a trivial amount, and unless you can quickly reach break even by bootstrapping your own or friends and family's money, VC funding is still the way to go despite all the strings attached (and no, you don't lose control, at least not after the first round, unless you have really bad lawyers). If your lawyers have no introductions, you are with the wrong law firm. Just take a look at portfolios of these first tier VCs: http://www.sequoiacap.com/search/?textSearch=video+game http://www.dcm.com/media.php? http://www.trinityventures.com/portfolio-alpha.php http://www.sierraventures.com/ http://www.menloventures.com/portfolio_list.html?sector=media http://www.redpointventures.com/portfolio/interactive-media-content-advertising/ http://www.mayfield.com/ (invested in Acclaim Games) Not to mention venture arms of Time Warner, Disney, GE, Viacom, etc. etc. etc.
DaDakota: This sounds like an excellent idea. When you are ready, I am prepared to PayPal you $2. I am not joking. In return for accepting my investment, I will not steal your girlfriends anymore with my hypnotic sexy power (also, for a bit of extra consideration in terms of a delicious sandwich or something, I will not use my gyrating pelvicular area on the female members of your immediate family). Anyone can see this is a sound investment, but this offer will not last indefinitely. thank you for your time, the thadeus
maybe i didn't explain my offer correctly. I know your abilities in the gaming industry. I'll give you (or get you) $1 M for fair valuation, but you have to go a year without posting. If you fail, you owe me $1 M, which essentially means, I take over your company.
DD that is one hell of a great idea. I think this company has real potential, so maybe the financiers will see the same. If you ever went public, I would definitely get in on that.
I actually wanted to go public straight away and let everyone in the world have an opportunity to buy in at $1 a share....and sell 6 million shares, but due to an antiquated 1930s law, every investor has to be a qualified investor and have a net worth of like $1 million, which cuts out the little guys, unfairly I think. Calurker, would you have some time to talk, could I email you through the board? You have that feature disabled, but feel free to email me. Also, regarding the lawyers, as I have always used them post deal, or in closing only, I have never asked them to help me set up meetings.... DD
doing some work for a VC company as we speak, meeting with him tmrw and will just ask if he has any leads for you....cant hurt to ask right?
I am still a fan of the antique Harpoon engine, I wonder what it would take to get the rights to it.... Anyway.... Mod support/tools? Online tutorials? I'd guess you need to nail those, or directly contact the guys who do this sort of thing already to get them interested. If everyone is trying to sell their own level or whatever, that would seem to stifle cooperation between modders, no? I'm no help, just thinking out loud.
Better yet, you could sleep with six million fat chicks for $1 a piece. Then you can brag that you've been with six million women.
