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Three tips from Ian Livingstone to make sure you're investor-ready

During our Investment Summit, Ian Livingstone CBE shared what he looks for in the companies he invests in

Industry legend Ian Livingstone shared his advice on what attracts investors during an interview at the Investment Summit Online, which was broadcasted all day yesterday on our YouTube channel.

In the span of his 45 year long career in the industry, Livingstone co-founded Games Workshop, wrote the Fighting Fantasy series, and launched Eidos. He also financially backed several companies as an angel investor and a partner in VC fund Hiro Capital, including Sumo Group, Playdemic, Mediatonic, Fusebox, Flavourworks and Midoki.

"I turned my passion of playing games into a lifelong career," he said. "I really enjoy angel investing, helping the new talents start off on what could be an amazing career and an opportunity like none other in this digital world, to make something really special which can appeal to a global audience."

As a result, he's developed "quite a rigorous checklist" of what he likes to see in the companies he invests in.

1. Have a strong leadership team

Your game and how it plays will always be the main reason why you'll attract investors, but Livingstone reminded the Investment Summit's viewers that the games industry is a people business.

"A lot of people have ideas -- it's the ability to execute on the ideas that's the hard bit"

"Now when people say to me: what are the three most important things about a game, I will say it's gameplay, gameplay, gameplay," he said. "But when I talk to teams and they've got a great idea for a game or they've developed a prototype, as an angel I'm taking a lot of risk. Sometimes it's pre-revenue, sometimes it's no more than an idea. So you have to make sure that there are certain things in place before you put money down.

"A lot of people have ideas -- it's the ability to execute on the ideas that's the hard bit. So what am I looking for? Clearly I'm looking for a great and senior leadership team."

He highlighted that it could be a waste to have a creative person "doing the VAT returns or submitting the annual accounts," so having a leadership team that combines business skills and creative input is crucial.

"[The creative person] should be concentrating on the content, to make the best game possible. So I like to see a team with a strong creative director and a strong managing director working in partnership. The creative director does not have to give up control to the business person. The business partner should facilitate that person who is creating the content to grow, to scale to global audiences, to create the right business model.

"So first off, it's No.1, it's people, the senior team. Then I think about what technology they have, what they own, what intellectual property the studio has. Is it their own IP? Are they looking to self-publish their own content or are they looking to be a work for hire outfit? What is their raison d'être?"

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2. Be earnest and transparent -- even about your failures

The studio's background and its track record are also crucial. A developer who has already shipped one or several projects will be reassuring to an investor for instance. But it's not all about what you've achieved -- it's also about the missteps you've had.

"I need to know what they've done before, I like to see people with scars on their backs -- as Americans say: skin in the game," Livingstone said. "What have you actually committed yourself in terms of worth, to get to the point you are? How much money did you personally invest? Are you afraid of failure? For me, failure is just success' work in progress.

"When I started Games Workshop with Steve Jackson back in the '70s, we were forced to live in a van for some three months, because it was impossible at that time to raise funding for our embryonic business. So I like to see some people who've suffered a little bit and just make sure we are in it for the right reason."

"There's so much competition that if your heart's not in it, just do something else"

And the right reason should include a love for making games. While that may sound like a given, a passion for creating within this industry is one of the many things that will help attract investors.

"There's so much competition that if your heart's not in it, if you're not passionate about the industry, just do something else," he said.

And this needs to show in your product and in the way you present it, too.

"I'm not too interested in derivative products or strange hybrids or something that can't be described succinctly," he said. "I'm not particularly interested in a PowerPoint presentation with profit and loss accounts, and projections, because when the game hasn't launched people have no idea how that game's going to perform, so I'd rather get excited by the content and the team. Show me what you can do; is this an exciting proposition? What's your business model? Then you might get my interest."

3. Show you understand the business of creativity

Having the passion is still not quite enough, though. Games is a business and you need to have a strong sense of what you're getting into -- which circles back to the necessity of having a strong leadership team. You have to be able to prove that you understand the market and the opportunity that you're presenting, Livingstone explained.

"So do they understand the business of creativity? There's lots of creative studios that are sometimes self-indulgent both in terms of not looking at the market opportunity and the business model they're going to employ. They're making a game for themselves and they expect people to invest in that proposition.

"The main thing is the ability to deliver and budget to schedule a proposition to give investors comfort"

"But do they understand how to scale to a global market? Do they know about partnerships and how to access difficult markets? Does their proposition resonate with a global market?

"The main thing is the ability to deliver and budget to schedule a proposition, that was given at the onset, to give investors comfort. For me as an angel investor, it's not a question of: 'Here's my money, see you in a couple years time, let me know how it goes.' Most investors -- and wearing my VC hat with Hiro Capital -- give as much help and support as the team requires."

Livingstone pointed out that he personally helps out with game design if required, as well as provides guidance about business models and platforms. Keeping an eye on the latest evolution of the business and showing you understand all of it is pretty crucial.

"Even at my old age I can still understand [these things]," he joked. "Because I read a lot about the future of games, the players, and the fact that the games industry is no longer just a games industry. It's an entertainment industry, and games are creating the third space, you know, the metaverse. We've seen Fortnite's users, during the current pandemic, rise from 250 million to 350 million -- 12 million concurrent viewers for the Travis Scott performance recently. You've seen how people not just play games but they go inside games to communicate.

"We're seeing major industries [and] media companies come into the game space now with Google, Facebook and Apple. All the major media players are now seeing the games industry as the go-to entertainment industry for today's generation. So you have to look as much to the future as you can based on what you know from history. So being aware of trends and business models for me is key."

You can rewatch Ian Livingstone's interview at the Investment Summit Online above or on our YouTube channel.

Marie Dealessandri avatar
Marie Dealessandri: Marie joined in 2019 to head its Academy section. A journalist since 2012, she started in games in 2016. She can be found (rarely) tweeting @mariedeal, usually on a loop about Baldur’s Gate and the Dead Cells soundtrack. GI resident Moomins expert.
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