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The Art of Raising Capitol #125173
04/20/07 00:33
04/20/07 00:33
Joined: Aug 2002
Posts: 535
Michigan
ICEman Offline OP
Developer
ICEman  Offline OP
Developer

Joined: Aug 2002
Posts: 535
Michigan
I've never seen this discussed before here, but I think it's appropriate to ask an inquiry or start a discussion about raising capitol to fund game (and other 3dgs media) projects.

No one works for free, especially nowadays, and finding those who do work for the experience that are any good is as rare as cougar-rand gold in Greenland.

So I'd like to strike up a discussion about how people who are going strong with their projects are keeping their mercinary programmers and artists financially pleased, and funding their marketing campaigns and production.

What kind of figures are you spending? Where/to who did you go to get the necesary funding? How did you sell your project as worthy of financing?

This, I feel, would be an important discussion to further advance the base of knowledge here for newcomers, and those, like myself, having trouble breaking into the art, due to ignorance in this respect.

(<--- That's right, ICEman admits ignorance. Take a picture, it'll last longer than my humble will ).

I'd like to know some of this information myself. I refuse to let my current baby, SkySpace, die. It's only needs.. some bit of money to get underway, according to my latest estimates, but I havent the faintest clue where to go about getting it.


I'm ICEman, and I approved this message.
Re: The Art of Raising Capitol [Re: ICEman] #125174
04/20/07 01:36
04/20/07 01:36
Joined: Mar 2003
Posts: 5,377
USofA
fastlane69 Offline
Senior Expert
fastlane69  Offline
Senior Expert

Joined: Mar 2003
Posts: 5,377
USofA
Great Topic.
Here are the traditional routes to seed the discussion:

1) Friends, Families, and Fools: These are the typical "three f's" that you go to first. You tap your friends who believe in you, your family who loves you, and any fool who believes in you. You might think fools is a harsh critique but if they aren't friends nor family and they are giving you money, well.... Of course to this fund you add your own money and this is where you start.

2) Angel Investors: these are a group of people who have lots of money and lots of time and want to do something fun. Mind you, you have to make a convincing arguement for how you are going to make their money back because they will ask for 3 to 5 times back the money they invested.

3) Venture Capital: Like angels but more organized. Generally they are interested in boosting a known company to greater heights. Angels will be willing to take greater risks where ventures need established companies. They will normally ask fof "5 in 5" or five times back the investment in five years.

4) Loans: This is a great route to take if you have lots of capital (homes, cars, land). A loan will not invest in you without collateral and so this is a good alternative to the Angels or Ventures.

5) Publishers: Why didn't I go here first? Quite honestly because I think these will be the hardest to get. This is because a publisher requires a known company with hits and experience and then they may or may not give you any money up front requireing you to do a reimbursement payout. A small publisher may give you distribution but not money.


Parting Shot 1: IF YOU ARE NOT WILLING TO SPEND YOUR OWN MONEY DON'T EXPECT OTHERS TO!
Parting Shot 2: IT'S NOT WHAT YOU KNOW, IT'S WHO YOU KNOW AND HOW YOU SAY IT!

Re: The Art of Raising Capitol [Re: fastlane69] #125175
04/20/07 02:57
04/20/07 02:57
Joined: Mar 2003
Posts: 4,427
Japan
A
A.Russell Offline
Expert
A.Russell  Offline
Expert
A

Joined: Mar 2003
Posts: 4,427
Japan
Quote:

This is because a publisher requires a known company with hits and experience and then they may or may not give you any money up front requireing you to do a reimbursement payout. A small publisher may give you distribution but not money.




Not necessarily, but be careful. When you are small and unknown you may be approached with offers that are unrealistically low or no contract is provided -and you may be inclined to accept them. I've been through some of these and am currently studying up on software consultancy.

Your parting shots are on the mark. However, you can get away with investing more of you own time than your own money. Unless you are going to work for someone else, expect to spend a few tens of thousands worth of technology and resources to get started.

One other point that is true in all businesses. The most common reason for a business to fail is because there isn't enough cash to meet overheads. The more you rely on outside funding, the higher your overheads and the less control you have over your company. Giving over control is not neccessarily a bad thing; it is essential for higher rewards, but only to a point that you are comfortable with. Not only is it hard to get funding, but once you've got it, it comes with heavy obligations. You need to make sure you have enough cash to carry you through at least the first six months. Small businesses that you can set up yourself are always safest, but unless you are wealthy, usually not big enough to be very profitable. A small business is usually a life-style choice. I can't say too much about running a large company, becasue I haven't had the experience.

Even a small software business is difficult to start. I've had a shot bar and an English school. In both of those cases money starts flowing in as soon as you open the doors. With software you have much higher initial overheads and a contract could take years to complete. Contracts are much more difficult to negotiate, wheras with a bar it's simple -"a beer, please." "That'll be $5 thank you!" -finished.

Re: The Art of Raising Capitol [Re: A.Russell] #125176
04/20/07 06:31
04/20/07 06:31
Joined: Aug 2005
Posts: 1,012
germany, dresden
ulf Offline
Serious User
ulf  Offline
Serious User

Joined: Aug 2005
Posts: 1,012
germany, dresden
from my experience now i can only advise you to not spend any money at all for your indie projects, only if its really, really nessecary!

for my current project utz wollewutz i bought some sounds and music really cheap! the rest is almost all selfdone stuff. now that i have contacted several publishers the offers they made make me laugh, they are so unrealistic. my game is finished, 99.99% bugfree, comes with manual, fansite, is multilingual, pretty unique and so on. meaning the publisher has zero!!! risk at all and zero!!! money to put in compared to other projects.
however with the contracts you get offered you even have problems getting the money you invested back. iam happy when the game is sold and i am not in the reds with the invested money for this project. and the stuff i bought was really, really, really cheap.

so for my next projects i plan on using as much open source software as possible. even improve my own art skills so i dont have to buy expensive stuff everywhere else. you basically have to be a master of sound/music, code, modelling, mapping, 2d gfx if you are an indie or you will have problems to make a living.

the next thing you have to keep in mind is that when you buy stuff everyone and their mother wants to be mentioned in the credits or say, you can use my stuff until you sold xxxx copies then i want to get more money. this is insane.

dont get me wrong, i just want to advise you not to spend money on indie projects. unless you have THAT killer idea THAT will definitaley sell its not worth it.

you probably have to pump out 1 little crap game a month and sign unfair contracts for each one to make little money that adds up in the end to make a living or you have this superdupergameidea and can finish it.

maybe some others can give their experience too. iam even thinking about not going to a publisher at all and selling the game on my own, this will probably get me more money even if i sell only 10 copies at all.

in my situation i wasted like 4 month working fulltime, if i would have stood in the city selling sausages i would have made more money - but its not only the money that makes me doing this.

Re: The Art of Raising Capitol [Re: ulf] #125177
04/20/07 09:24
04/20/07 09:24
Joined: Mar 2003
Posts: 4,427
Japan
A
A.Russell Offline
Expert
A.Russell  Offline
Expert
A

Joined: Mar 2003
Posts: 4,427
Japan
You've done it the wrong way, Ulf. Publishers don't want to pay for something that is already developed. People want what they don't have. A [censored]-hot demo that will will take until just before next Christmas to complete is a far better sell. They'll want to input their own ideas too.

Be careful with open source. Avoid GPL. Publishers want what they can buy lock, stock and barrell. You'll probably see a clause in the contract they present to you about that. They'll want the copyright. Make sure everyone who does work for you has a contract that stipulates "work for hire" as well. Otherwise you might find that you don't have anything to sell. Anything you absolutely don't want to give them, list as royalty free, licenced material (you can licence material to your own company). However, they will expect some bang for their buck. Obviously, they are the ones taking the biggest risk.

Four months is very short for a video game you made yourself. Commercial titles are usually measured in man-years. If you made it for yourself, because you liked doing it, then that's fine. If you want to make it for someone else so you can make some money, then you need to balance what you want to do with what your source of funding has a demand for. Unless you are a proven, multi-million selling superstar, then you can do anything you like and make megabucks.

Re: The Art of Raising Capitol [Re: A.Russell] #125178
04/20/07 10:42
04/20/07 10:42
Joined: Aug 2005
Posts: 1,012
germany, dresden
ulf Offline
Serious User
ulf  Offline
Serious User

Joined: Aug 2005
Posts: 1,012
germany, dresden
i would not say its the wrong way i did it, because iam doing what i like to do - iam an indie.

if you develop a game for someone else then you are more a programmer than a game developer.

the main problem these days is that the market with casual games is flooded. i would say my game does not have many competetors, but lots of people who like playing this kind of game. there are already 2-3 games like this selling very well.

the topic is about get funds for your own game as far as i understood and i highly recomend you not to do, because its not easy selling your ready made game. but i dont understand why, if i walk into the city and see the pc shelves i can find at least 20 really crap casual games with horrible art/gameplay that just sell because of a cool name/cover.

Re: The Art of Raising Capitol [Re: ulf] #125179
04/20/07 14:19
04/20/07 14:19
Joined: Mar 2003
Posts: 5,377
USofA
fastlane69 Offline
Senior Expert
fastlane69  Offline
Senior Expert

Joined: Mar 2003
Posts: 5,377
USofA
Quote:

the topic is about get funds for your own game as far as i understood and i highly recomend you not to do, because its not easy selling your ready made game




I have to strongly disagree with this advice.

You are confusing making a profit with raising capital.
Selling a game can make you profits. But making a game requires capital.

There is simply no aspect of game development that will not benefit from having some capital behind it period.

Then again, if your arguement is that you shouldn't take any money because you are unlikely to make any money, then you're right. But this is the distinguishes a hobbiest and a professional IMO. It's not the skill or the knowledge but where you want your game to go and how many people you want to see it. A hobbiest only makes games to be seen by themselves and a few others so yeah, it makes sense not to dump a whole bunch of money into it. A professional wants their game to be seen by as many people as possible and hence will dump money into their game to have it make the best possible showing.

Quote:

meaning the publisher has zero!!! risk at all and zero!!! money to put in compared to other projects.





I also want to correct you on this notion. The publisher is taking a HUGE risk with you. They will have to put money up for distribution and publishing; for advertising and marketing. And even if they don't do any of that (in which case why bother!), they are taking a risk with who you are. If your game sucks, this will reflect on the publisher. They won't say "Oh that Ulf makes horrible games! I'll never buy from him again!" No, they will say "Oh that publisher puts out horrible games! I'll never buy from them again!"

This is the risk you take with self-publishing. The author and the publisher are the same and thus you are risking your reputation with the public when you do this. Publishing errors that have nothing to do with your game (like games not devlivered or e-commerce site is down) will reflect negatively on you as a game designer and again hurt your reputation.

EDIT: Washington DC == $$, but changed anyway Jetpack.


Last edited by fastlane69; 04/20/07 19:55.
Re: The Art of Raising Capitol [Re: fastlane69] #125180
04/20/07 15:02
04/20/07 15:02
Joined: Mar 2003
Posts: 5,377
USofA
fastlane69 Offline
Senior Expert
fastlane69  Offline
Senior Expert

Joined: Mar 2003
Posts: 5,377
USofA
Quote:

The more you rely on outside funding, the higher your overheads




I agree with everything you said, Alex but I don't understand the above quote.
How is it that your overhead rises the more outside funding you get?

Re: The Art of Raising Capitol [Re: fastlane69] #125181
04/20/07 17:20
04/20/07 17:20
Joined: Nov 2003
Posts: 1,659
San Francisco
JetpackMonkey Offline
Serious User
JetpackMonkey  Offline
Serious User

Joined: Nov 2003
Posts: 1,659
San Francisco
capital = $$
capitol = washington DC

Sorry

Re: The Art of Raising Capitol [Re: JetpackMonkey] #125182
04/20/07 18:26
04/20/07 18:26
Joined: Aug 2002
Posts: 535
Michigan
ICEman Offline OP
Developer
ICEman  Offline OP
Developer

Joined: Aug 2002
Posts: 535
Michigan
@jetpack..

... Eh.. I made a concerted effort to use the right word. Oh well, you know what I meant .

@ ulf

What I plan to develop isn't quite a game (only in the sense that its not "playable", though it is interactive).

However, my main reason for needing capital is to develop it, as I have'nt seen more than a handful fo developers willing to build it and have faith that it'll sell.

Because it's not a game, I am confident it would, but I could explain the concept of SkySpace till I was blue in the face, and still not be able to sell a programmer or leveler enough to help me build it, let alone 2 or 3 of each so that it doesnt take a year to build.

I imagine, and have thus far been right to assume, that the only way I'd be able to keep them long enough is with financial incentive. And probably a decent bit of it.

What I'm building now has two main bodies in its cost analysis.. the labor and marketing. Marketing is straight forward. This particular item will need heavy exposure volume of exposure would be direc/prop to volume of sales... just like every other impulse item.

I know when and where to put the birdie, marketing wise, but I have to build the software first.. I can't do that without developers.. hence the return to the beggining of this vicious cycle... acquiring the funds to pay the troops to build the bridge that leads to progress on SkySpace.

Mind you, if you saw the design, you'd see the revenue far outweighs the cost, but even on paper, I struggle to imagine the development team that's eevr been sold on solid concept alone.

Or at least I have yet to encounter them. So my contingent is to become able to speak plenty of their language: money.

I've come to the understanding I dont havta like em, we dont havta walk hand in hand.. or have the same dream.. I just need to be able to speak dollar to em ( while not being a bunghole boss) and I'llg et things done.

Hence my inquiry as to how some of you got working.

Last edited by ICEman; 04/20/07 18:29.

I'm ICEman, and I approved this message.
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