No problem, do a "bookbuild" of sorts, and if you find adequate demand, then have a qualified investor/firm act as broker and sell to individuals (with the "bookbuild" as proof ofcourse"). It's unconventional, but that's what you asked for.
I am not sure that works Ehsan, we even talked about going OTC right away but then you are subjected to the whims of day traders etc which can kill your stock price and ability to raise future monies. Maybe we could create a hedge fund? DD
sounds like you don't need the whole 6 million right now lots of companies go through multiple rounds of funding... why dont you shoot for 600k.. release a couple products and then go from there 600k should be pretty easy to come by I would think
Actually, we do need the $6 million, our development costs in the first 18 months are about $5 million....but that is for 3 products.... It is a conundrum, if you just do the development, you can't do the community website and you have no marketing and no audience, yet you can't do the audience without the development. So we have to do both..... DD
You never know, I got funded at Digital Anvil by sending an email to Bill Gates, it is hanging on my wall as I type this. DD
It's really a bad idea to get funding by a lot of small shareholders whose only goal is to wait it out until an IPO. When you get to 2nd round, no VCs will want to touch it unless you buy the shareholders out.
If we did that route it would be without VC, and we would control the company and number of shares issued etc, but since it is illegal, we are going another direction. This post has already generated a couple of great contacts, so, you just never know. DD
Hey DD, I know a very unconventional route. Sounds like you and I are on the same path raising capital. I met a guy who said he raised $3 million in 3 months. He knows a guy who will help finance a buyout of a shell corporation that is traded on the pink sheets on the NASDAQ. He told me to make sure the symbol is close to what you want your company name to be. Then start trading on the pink sheets. His stock was selling at $0.04/share but then again he was raising a whopping amount of money without putting any of his at risk.
I hate the pink sheets and reversing into a shell.......I have a bad taste in my mouth from Gizmondo and that is the avenue they used. The OTC or pink sheets are notorious for pump and dumps.....for now I am avoiding that. And usually to reverse into a shell it will cost you about 100k, plus you have reporting issues which also add cost. DD
Angels are proly not going to put up that kind of money to fund a single company. I know one that funds 10+ different startups with seed money (much smaller than the 6 you are looking for). VC would be the other way to go, however they might want to you to be fairly far along, if you are pitching something that has zero revenue, then it might be a tough sell. Then again, it has been 5 years since I dealt with one, so things might have change a bit. Also I think the best VCs are on the coasts. Here in northeast, there are several big ones, Matrix, Bessemer, Charles River. I guess depending on how far along you are, maybe lower the amount you are looking for and get something working first with some seed money? Also some top universities have big ticket projects, have you thought about partnering with them? P.E. is mostly likely not going to work, and hedge fund is a terrible idea.
Can you sell options for a future IPO, and use the consideration for the options to fund your startup? In other words, 6 million options (sold at a dollar a piece) to buy six million shares at some date in the future. It's kinda like micro-IPO. Hmmm, interesting.
My brother raised VC in this amount for a software start up. His sources were on the west coast. I will try to find out if he wants to share any info.
I have a pretty good contact at Motorola Ventures. i think you have my email, if not hit me up through the board, and i can give you an intro.
Just out of curiosity, what do you need $5 million for to develop the first few games? Is it all salary for the coders? Hardware/sofware costs?
It is mostly salaries for developers, artists, programmers, designers, then the web people etc..... The actual software and hardware and location costs are not that much. The people are what cost the money.....especially if you want to guarantee it will work, you need GOOD people you know can get the job done. If you look at it like a portfolio play you are getting 10 games for $6 million. A quality game usually runs $5-$10 million and an MMO runs about $25 million. Since we are using revenue to fund our company and have games that are close to completion, our finishing costs on the first few games is relatively small when comparing it to industry standards. DD
how much do developers get paid? assuming $50 per hour per developer, $5M can get you 570 developer months or 30 developers for 18 months
