FUNDING THEFUTURE OF MOBILE GAMES

Kristian SegerstraleCo-founder, Initial Capital

@ksegerstrale

kristian@initialcapital.com

QUICK INTRO

LP / CO-FOUNDERINVESTOR / ACCELERATOR(SUPERCELL, SWRVE ETC)

2010-

MOBILE GAMESCO-FOUNDER, VP

MACROSPACE($320M IPO)

2001-2007

SOCIAL GAMESCO-FOUNDER, CEO

($400M SALE TO EA)

2007-2012

EXEC VICE PRESIDENT, DIGITAL

( DISC TO DIGITAL )

2011-2013

STATE OF MOBILE PLAY

• Million dollar games • Billion dollar games

2012 2014

• No publishing leverage

• Fragmented companies• Dev budgets in $$ k• Performance marketing

• Global powerhouses• Dev budgets in $$ MM• Broad media mix

• Category opportunities• Evolving discovery

• No publishing leverage• Category opportunities• Evolving discovery

1BN MOBILE DEVICES SOLD IN 2013

Source: BI Intelligence

MOBILE DATA IS EATING THE WEB

Credit: Mary Meeker 2013

TABLETS OUTSELLING LAPTOPS

Credit: Mary Meeker 2013

EVERYONE IS SHARING EVERYTHING

Credit: Mary Meeker 2013

GLOBALIZATION OF DEMAND

Source: Mary Meeker 2013

SO THE FUTURE IS AWESOME!

BUT HOW DO I FUNDGETTING THERE?

GETTING FUNDINGIS A

RECRUITMENT EXERCISE

THREE TYPES OF FUNDINGPublisherFinancing

StrategicInvestment

SeedInvestment

+ Self financing & crowd funding

… … …

PUBLISHER FINANCING

• Access to marketing and monetization expertise• Access to technology and data• Access to cross promotion networks• Marketing execution

• You give up the majority of ability to invest in your business• You give up all intellectual property• You give up any chance to scale independently

Publisher finances, advises on development, handles marketing

• You want a lifestyle business making games• You can’t get funding from elsewhere

RIGHT IF:

SEED INVESTMENT

• Access to broad expertise from product / marketing to M&A• Partner to look out for you as shareholders• Assistance in company growth, further financing, channels• You keep and re-invest all revenue / profits

• You dilute your shareholding by 15-30%• You create governance around you (Board etc)• You agree that it’s important for shareholders to have a return

Investors buy 15% - 30% of your company for $300k - $2M

• You want to build something really big and change the world• You want to realize the value of your shares one day

RIGHT IF:

STRATEGIC INVESTMENT

• Access to industry expertise from product to marketing• Access to channels to market, technology, data• Assistance in company growth• You keep and re-invest all revenue / profits

• You dilute your shareholding• You create governance around you (Board etc).• You create a potential misalignment for further financing

Industry actor buys a share of your company at any stage

• You want to build a business that scales to be really big• You are comfortable potentially giving up financing options

RIGHT IF:

WHAT WE LOOK FOR @ INITIAL CAPITAL

1. Talent team and what you’ve

made together

2. Creative first vision and passion for a style

of game

3. Market awareness healthy push and pull inside of team

4. Chemistry would we join this company

5. Location san francisco, london, finland

What you love toplay and make

What you think themarket will love

DISASTERZONE

HIGH RISKZONE

MAKE THIS

FINAL PIECE OF ADVICE

THANK YOU!

Kristian SegerstraleCo-founder, Initial Capital

@ksegerstrale

kristian@initialcapital.com