If you had financial backing.... how would you..
PixelPun
Member Posts: 324
I just have a question to everyone out there... I have a friend that has come in to some money over the past few years and he may be looking to invest in something... Well I am very good at art and design and I am confident that with the time and GS I could make great games for iphone. My question to you guys is how would you propose such a thing to someone. My thought was to ask for a years worth of salary say 25-30k as seed money... or enough to live on as I do now with my 40+ hour a week job. And instead of working a meaningless job... work on games. So what would you guys do? What do you tell that person to make them invest? And how much of the game profit should they receive? Thanks for any help I get.
O yeah 25k would be a drop in the bucket for this person..
Thanks
Rob
O yeah 25k would be a drop in the bucket for this person..
Thanks
Rob
Comments
You have to remember you wouldn't be asking for a salary but its an investment so you have to be able to make realistic offers of returns on his investment. He would be unwise to invest in an idea or person who could not return his initial investment plus profit.
Also think about your future if after 12 months things havent worked out as you had hoped and you need to go back in to the 'job' situation.
I know you didnt ask for such warnings but hey... and if he's loaded and 25K is nothing to him then tshirtbooths set up is fair and would make you work hard too.
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Music for your games
if it were me I would treat this very much like a business decision (leaving the fact that he/she is a friend out of your prep). Prepare a basic business plan with some projections (how many games you plan to produce, how you hope to promote them, compare some info you might know from what people have shared here ie: sales figures etc). Determine what you are giving for the money .. is it ownership in a company, % of potential sales, interest on the 'loan'. List the Strengths, Weaknesses, Opportunities and Treats (SWOT) of your plan so he/she knows that the money could come to nothing. Determine what happens after the first year. Does that person still participate in your success if your apps do well and you continue to make more?
Why do this? Well I had childhood best friends who I no longer speak with because a business I was in with them went sour, my neighbour doesn't talk to his brothers over the same reason so it has potential peril unless you think it thru first and layout the 'what ifs'.
Where the fact that he/she is a friend comes into it will be that any investor and/or bank would laugh you out the door (nothing personal) so you are going to use the 'friend' angle to at least get a good listen and consideration. If it goes well ... draft a formal contract and good luck.
Lastly I would also consider working nights and weekends to get a first game out there so you can prove to yourself and your friend what you are capable of. Sounds like the money will still be there 3 months from now so you have little to lose.
1) How many games do you project to get out within a 12 month period. You could easily spend that entire year on 1 game, or you can break it down into lots of little games (like 5 or 6).
2) How do you propose to sell the games? Free w/ ads? $0.99 for each game? In-game purchases?
3) Do you plan to do something other than GameSalad?
4) How long have you been working with GameSalad and what are your long-term plans to use with it? I'd include information on where GameSalad plans to go over the next year and what features GS plans to include in the professional memberships.
5) Why do you think your games will sell more than others or what will set them apart? Do you have ideas on how to be more successful or as successful as the standards on iOS (i.e. Angry Birds, etc).
6) What is the exit clause for you and/or him? Let's say you create an AMAZING game and you make $100k on it. How long will you keep paying him 30% if you're making awesome games time and time again? If you're not making any money at all, does he have the option to ask for some of that payment back? Say if you're wildly UNSUCCESSFUL does he get a check for $10k as some way to recoup some of your loses? Or is he just out the 25-30k?
7) Will there be updates to him (weekly, monthly, etc)? Does he have any creative input into your games? I'm assuming you'll give him promo codes for free games :-) Does he get to do anything with you?
If I were you, I'd treat your friend as a bank. Put your thoughts down on paper and create a mini-contract. You put down the answers to those questions and add in your game ideas and some artwork samples and give it to him with a proposal for how much money you want and how your going to make that 25-30k back for him/you. From my experience, the reason that most bank loans fail is that people don't ask for enough money. Make sure that if you ask for 30k then you'll be able to use that and you won't run out of money.
I would not give out money on promises, but might on example of something I could see was a worthy risk.
I have been down the path of taking investment to start a game company and there a pros and cons to both (story for another time).
Basically you need to put yourself in his shoes. What does he want to get out of this? What in it for him? Most people only care about what they get out of a business deal, so if you can work out what he wants, then deliver it to him it should be easy to convince him.
You also need to have a very clear idea of what you are going to do with the money - it sounds like this guy might be a game dev fanboy and you might end up working on all of his.....awesome ideas. If he just wants to spend some cash and tell people he makes games while you are in charge of creative and day to day implementation, great. But if he wants to be hands on then it might not be so enjoyable for you, unless the guy is a genius.
It sounds like this guy might be a game dev fanboy without actually knowing it takes to maek a game, so I think you need to be very clear with him the risks, problems and issues with the industry before he pokes his toe in, otherwise he might be pissed with you later on down the track when he finds that it actually takes a lot of hard work, learning and trial and error to make a game, then the % chance of actually making a hit is 1 in a million.
Then he decides to pull out and you're left with no job, no money. On that note I would write into the contract what happens in that situation too, if he decides its not fun anymore, what guarantees do you have? You need to protect yourself too.
So I would recommend:
1. decide what you want and be very clear about it
2 try to work out what he wants out of it, what his motivations are.
3. present it to him as a written plan - keep it short, bullet points are great.
4. If its cashflow style (month to month) payments make sure you protect yourself if he decides to pull the plug - have a clause in the contract saying he will pay you x months termination fee or he will hand over all ownership of any games including any future royalties.
I would say as the most important thing out of all this, besides the money, what can this guy offer you? You and him will become business partners and that means a lot more than just money, so if you guys aren't compatible, don't have the same end goal then there will only be problems. Trust is also a huge issue, do you trust this guy? Does he trust you?
Anyway good luck with it all, I've been down all the paths before and taking someone elses money to make games has its good points and bad points...If you havent thought about them:
Good points
* More time and resources = higher quality games - > better chance of success
Bad Points
* Depending on the situation you might still have a boss.
* You are spending someone elses money - this can be stressful.
* IF this guy doesn't know what he's doing in games, he may be a hindrance to you.
* Cashflow finance is dangerous, especially if you don't have savings or you're not protected in the contract. If he decides to pull out you could be left with no money and no job.
Most of those bad points you can overcome as long as you're up front with him and get them into the contract. A good way I would suggest is monthly meetings, where you sit down with him and show him progress - that way he feels like he has some input and is being involved in the game design as well as allaying any fears that you might be sitting around doing nothing.
Anyway hope you can learn from my experiences and this all works out for you.
Good Luck