Give me the money: A mobile funding application guide
AppQuantum's Victoria Beliaeva details the whole process to get investment for a mobile project
Each company cares a lot about its funding. Whether it's to develop a new game, grow a studio, or transform a gaming passion into a successful business, none of this would be possible without resources.
Even a supposedly hit idea requires a compelling pitch, a high-quality presentation, and a relevant offer to secure funding from investors.
This guide will explain in detail ways and reasons to prepare a good investor pitch and is based on the conference lecture I gave at the WN Dev Day Canada 2022.
Before applying for funding, it's crucial to know the purpose for which you need the funding and the things you will use it for. Thus you can quickly figure out the deal format and then look for the right partner in the future.
The most popular funding forms
Product funding without investing in the company itself
In this scenario, money is allocated to a specific project, mainly under tight KPIs and milestones, with a refund from the developer's share of the project's income. Promising projects rarely get financed without investing in the company, but exceptions may always occur. For instance, we only consider this option in conjunction with the subsequent publishing of the project.
If you don't want any further obligations in terms of publishing and selling shares of the company, you can also consider angel investors or wealthy friends/relatives.
Keep in mind that with complete coverage of the team's burn rate, in the majority of cases, the IP will belong to the investor.
Development funding later convertible into the company's share
Almost similar to the previous point, but with the option to convert the amount spent on development into the studio's share (either fully or partly).
In this one, the company is freed from the obligation to pay back the debt from the project's income. This option is convenient when both parties are interested in a considerably promising project, but are still determining whether they are suitable business partners.
Development funding + investment in the company
The main difference here is that such funding consists of two different deals. It doubles the number of papers for you to sign but makes it easier to get started.
For instance, a publishing and financing agreement can be done way faster than the investment one. In this case, you can sign one of the contracts and get down to the development right away while the second one is still being drawn up.
This option involves purchasing a share of the developer's company without an additional development or publishing agreement. This option is often suitable for those in need of funds to scale, while already having a sustainable project and a team. This may come along with other cooperation formats such as co-development, publishing, etc.
Prepare the investment
Once you've decided that you need investment in your company, ensure that all your accounting and legal issues are settled. In case there are problems, think about how you will resolve them and whether you will need the help of an investor.
Examples include creating a new legal entity or undergoing an audit stage if your company has been around for a while with a cash flow history of income and spending. Ensure that you create all the necessary conditions to pass this stage as quickly and painlessly as possible.
How to apply for an investment?
We recommend establishing clear goals before applying for investment. A few questions can help you with this:
- Do you want to handle the full cycle from developing to publishing or only focus on development?
- What genres do you plan to work with in the future, and what kind of team do you need for this?
- What do you expect from your partner: financial support, relevant expertise in your current genre, or knowledge in a genre you want to explore in the future?
Providing honest answers will enable you to build a relevant shortlist of possible investors and develop a good pitch. Having a clear understanding of your business needs and wants will increase your chances of finding a reliable partner.
In order to apply for investment, you will need to do a number of things, detailed below.
Research is a crucial step in the investment process. Look into companies currently offering investment and funding, and use the answers to the above questions to filter potential partners. If you require a partner with genre-specific experience or expertise in publishing and marketing, seek companies that offer these services.
If you have enough free time, reach out to studios and inquire about their experience with their investors
This point may seem obvious, but some developers forget that not all companies provide the necessary services and required expertise.
Additionally, consider the companies your potential partners have previously invested in. You can easily find press releases about investments online and look at data from analytics firms to see if the businesses they invested in have succeeded.
It's essential to keep in mind that developing a project from scratch takes time to yield results. Therefore deals signed only six months or a year ago may not provide an accurate picture. Looking at data from two to three years – or even five – can give you more useful information.
If you have enough free time, reach out to studios and inquire about their experience with their investors, what they do and how they help, or on the contrary, about the things they can't help with. That can be done at conferences, for example. And remember, an NDA does not restrict good recommendations!
2. Prepare the material
Regardless of the funding type you have chosen, the following set of materials will be required:
- A presentation about your company
Share the most important facts about your studio:
- Foundation date
- Registration country
- Field of expertise: genre, niche, art style, target audience
- Technical stack: engine, single player or multi, etc.
- Released projects. Make sure to tell more about the games developed and published by your current team (in case there are any). Your projects aren't published? No problem, just leave a link to the games you've developed. Don't forget to provide details about genre, art style, target audience, release year, number of downloads, total revenue (when applicable)
- Team (number of employees and breakdown of their specialty, number of offices and their location). Talk about key employees in more detail: their experience in game development, the projects they've worked on in general, and in your company specifically.
- Project information
Whether you need investment for a project in live ops or the pre-production stage, you have to provide details about it. The only difference will be in the content.
If you have a new project, provide a high-level concept that will include the following:
- Genre, art style, setting, USP, target audience (if you have a service, then instead of the genre and art style, mention its technical components)
- Key gameplay/art references
- Concept or GDD
- Competitors and market analysis
- Roadmap and target KPI
- Ideally a financial plan which shows the point you plan to be in the black
- Required funding amount. Remember that if you don't expect your partner to take part in the publishing process, you'll need to take into account marketing expenses as well
For a published project, indicate product and marketing metrics. Those include:
- Main product metrics: Retention at Day 1, 7, 14, 30, 60+, ARPU, ARPPU, Ads ARPU (be sure to tell which GEO the metrics were taken from and which analytics system was used — for example, US, AppsFlyer, October 2022)
- You may as well indicate the volume of traffic purchases (in case there were any) and sources
If you need money for scaling (for marketing, hiring, etc.), then you should provide detailed information about your main project: its KPIs, development plans, and financial expectations. You will also be expected to show the investment allocation plans: sources of purchases, people you are planning to hire, and so on.
Use these materials in your emails to investors. While some companies may have specific requirements, all listed above should be enough for a general intro.
3. How to create a good application?
Sadly enough, we still receive requests that just read: "Hello, we are team N, and we would like to receive investments for the development of our game *store link*."
To make things easier, we've prepared the following template:
- Talk briefly about yourself, who you are, what you do and what you want to receive
- Talk briefly about the main advantages: highlight the metrics of new or old projects and prominent members that are on your team
- Mention convenient slots for meetings
- Attach the presentations we talked about above (about your team and project)
Hi! We are BlahblahGames, we develop casual free-to-play games and mainly specialize in the time manager genre. We are interested in finding the right partner for our next project, a time management game in a space setting. We have already received some promising results by testing the MVP of our project in the US market: ret day 1 of 45% and ret day 7 of 20%.
Our studio has 20 years of experience in the niche, and we are sure we have found a way to revolutionize the market.
We are located in Spain, so our time zone is UTC +1, and we will be glad to meet any weekday after 11 am.
Please find more info about our company and project enclosed.
Tips for online meetings and calls
During the call stage, developers may struggle to communicate their needs to potential partners clearly. Funding is a given, but who will be in charge of live ops or the game's marketing? Does the company consider investments in the product only or in the team as well? If so, what numbers/shares do they find appealing? And quite a number of other questions to a team that knows no answer.
Formulating your request as clearly as possible is crucial to increase your chances of finding the partner. If an investor has to put in extra effort to extract necessary information from you, then you are clearly not prepared for a meeting or further productive work.
Furthermore, each investor evaluates studios based on their own inner criteria. It includes things beyond just desired profit. For instance, we always look at founders: their background, their passion for their ideas, and their ability to assess the market, prospects, and risks.
Then, we analyze the team: if the employees get on well, whether the team has already released any products, or how experienced each member is.
Prospects for the team are one of the key factors that investors consider. Whether you want to build a full-cycle company or develop mid-core games, you need to be prepared to discuss goals, so we can better understand how to make our collaboration as beneficial as possible.
Remember that not all of your products may be suitable for an investor. It's better to communicate your needs and goals early on and clearly to avoid wasting time for both parties.
You are likely to be asked the following additional materials during the first meeting:
Undoubtedly, such materials are to be provided only after the NDA signing. However, we recommend preparing all the documents in advance before drawing up the application to save both parties precious time. You, in your turn, have the right to request additional information from the investor, such as drafts of the following contracts:
- Investment treaty
- Convertible loan agreement
- Joint development or publishing agreement
- The term sheet, if we are talking about options
Investors should have all these documents at hand, so they should be immediately provided to you upon request.
Ask the investor to compose a detailed work roadmap, e.g., types of tests and when they are expected. If the investor also acts as a publisher, the roadmap expands and now includes live ops, marketing, analytics, and other services.
Further steps may vary greatly depending on who you are communicating with and what types of deals are in discussion. You should expect a series of meetings with teams, your future project partners, and decision-makers.
The described process can be applied to most deals. Rest assured that completing the guide will greatly increase your chances of getting funding. A correct and comprehensive approach will help you come across as confident professionals who know their needs, wants, and ways to fulfill them.
Last tip: start looking for partners in advance. Good market research will surely take a lot of time, and several weeks more will be spent on getting acquainted with potential partners. Preparing contracts also tend to take months — even with the drafts at hand, a lot will be altered depending on the company's structure or its registration country.
- Pre-production is a solid base and half of your success
- The negotiation and approval process can take up to several months, so start looking for funding in advance
- Choose the funding type and suitable options for future agreements
- Choose the kind of partner you want and what additional obligations you need them to fulfill
- Research the market to find out companies that provide funding and studios they have already invested in, request feedback from developers, and analyze the results of their collaboration
- Create a high-quality presentation about yourself and your product that is comprehensive and contains all the necessary information
- Write a good intro, try to get across all the information about yourself and your product, and share a convenient time for them to contact you
- Before a personal meeting, prepare answers about your team: what you're looking for, why you're developing this particular product, and why you've decided to seek investors
- Be prepared to allow direct access to traffic trackers and share company financial information (under NDA)
- Do not grab the first opportunity, talk to different potential partners and choose the best option suitable for you and your company
Victoria Beliaeva is head of business development & PR at AppQuantum, a field she's been working in for over five years. Previously she tried herself in various fields, such as production, narrative design, and content management.