game companies as an investment 4.9.2012
DESCRIPTION
Presentation given at game seminar 4.9.2012 at OAMK. Talks about investors different business models and their wants when looking at game companies as investment target.TRANSCRIPT
The TeamPartners
Matti Kanninenmanaging partner
Juho Riskupartner, co-founder
Antti Kosunenpartner, co-founder,
and Board member
Board of Directors
Jukka MäkinenChairman of the Board
Jari PasanenMember of the Board
Idea
15‐90 k€ 200‐400 k€ 1‐2 M€ xx M€
Unqualified Qualified pre‐seed/seed Qualified expansion
Accelerating
StartUp
Financing
Financed – Exit
”TechStars” Go fast forward
or fail fastScoutingScouting
Basics Preparation Proof of concept
Scope of main interest
OperationalizationOperationalization
Scale‐up
Σ < 500 k€ Σ < 2.5 M€
Investing from pre‐seed to follow‐up
First time Investment
Follow up InvestmentFollow up Investment
Follow
Exit
Expectations
10 * Valuation
Exit driven model
Company
Investor• Money• Expertise
Valuation
Cash flow
Investor• Money• Expertise
Exit
Cash from stock sale
Exit driven startup
• Has a very large market potential– Most of the potential not realized in a form of positive cash flow at the exit
• Is easily scalable, usually globally– Smart customer acquisition logic built into business model is a plus
• Has strong IPRs or a business model that accumulates value over time– Customer retention can be clearly articulated
• Money• Expertise
Cash flow driven model
Company
• IPRs (value)
Product launch
x% cash flow = 10 * money investedInvestor
Product x
1‐x% cash flow
End of life
Cash flow driven product
• Requires less capital over life cycle, can accept more market behavior related risk
• Has well defined, easy to understand product and clear simple business model
• Has short time to market – Straight forward development, no technology related risk
• Generates large positive cash flow fast– Has short sales cycle– Are usually consumer market products
How to choose the right model
Exit driven model• The grand vision is large
enough to fill the purpose of the company alone
• IPRs are patents or accumulated during longer period of use (information)
• Founders ready to sell the company or IPO is a realistic option
Cash flow driven model• Company is based on idea
of multiple products• IPRs are mostly creative
content based and different in each product
• Founders like to keep the options open for future
• Successful product can be used as a future reference
Investment criteria
• Needs to have or plan to have some operations in the Oulu region
• It’s scalable• There’s global demand and market• Driven by one of the market trends• IPRs are involved• There’s the Team