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    8 Replies Latest reply on Mar 2, 2008 3:36 PM by DJM0231

    Venture Capitalist/Angel Advice Needed

    DJM0231 Wayfarer
      Greetings,

      I am a sole-proprietor of a consulting business (disaster
      planning and federal acquisition). I
      will be closing the doors of my business to relocate to Northern NJ. My father-in-law, who lives in NJ, was
      recently diagnosed with Plasma Cell Myeloma, which has spread throughout his
      body.

      I am researching the opportunities of starting a video game
      development company once I relocate to NJ.
      It's a childhood dream I would like to bring to fruition. I am looking for advice in regards to capital
      funding via Venture Capitalists and Angels.
      I have a general understanding of VC's. I don't believe I will be taking this route
      as I will not have the capital on hand needed to bring VC's to the table. I have researched the internet and these
      forums and I believe I have a basic understanding of angels. I guess I'm seeking some elaboration on how
      to approach this avenue.

      Here are some specifics in case anybody is curious:
      • Business Plan - In progress
      • Marketing Plan - In progress
      • Design Documentation (Game Concept and Proposal) - \\ Continuous work in progress
      • Start-Up Costs (Staffing dependent) - $50,000 to $250,000 ** \\ Includes tangible assets **
      • Investor Risk - Game investment is considered high \\ risk. I feel my product idea is solid \\ and will definitely return a profit. \\ Please don't mistake my confidence as cockiness. A product is only as good as the team that \\ develops said product. I'm not expecting \\ to make the top selling game of all time. \\ I do feel that it has the potential to be a popular title.
      • Background - I'm a former U.S. Marine. I acquired many IT skills while in the \\ service. After almost a decade of \\ service I separated as a disabled vet and began working as a government \\ contractor developing and testing software for the U.S. Navy. As stated earlier, I have my own company and \\ strive to finish my degree in Business.

      Thank you all for taking the time to read this and look
      forward to your recommendations.

      DJM0231

       


        • Re: Venture Capitalist/Angel Advice Needed
          Extescalade22 Newbie
          DMJ,

          One of the best things you can do is once you finish your business plan, figure out all your routes of distribution and bring those in to the table when you meet with VC firms. They are not only going to want to see that you have a product, but that you have a way to get it to market.

          I have dealt with them, and trust me, they are interested about the money more than the product. If you can show them a good product, but a great way to get it into the customers face, you'll have a much better shot.

          Make sure you play up your current and past role in the IT industries. Thats perfect that you are staying within the feild you have history in.

          As far as VC firms go, you should be able to find a decent amount of them out there, and a good place to start is GoBigNetwork.com. I have some decent success with them in the past as far as thier information being up to date. One tip though, if you look through and find all the companies that meet your criteria, and then write down all thier names, search for them through Google. By doing this, you can bypass the membership fee for the contact information.

          Good luck, and best wishes.

          Brian

          PS: I hope everything works out with your father-in-law, and good for you making the sacrifice to help him out in his time of need.
          • Re: Venture Capitalist/Angel Advice Needed
            LUCKIEST Guide
            Welcome to this web site.
            Venture Capitalist/Angel Advice Needed
            Greetings, Do you know about SCORE?? SCORE is FREE.
            You can visit SCORE Virtual Learning Center at "www.score.org
            There you can get help with both Business and Marketing Plans
            LUCKIEST
            • Re: Venture Capitalist/Angel Advice Needed
              Lighthouse24 Ranger

              In the past few years, more angel investors have emerged and a lot more businesses have started seeking them out. It used to be a challenge just to find an angel in the first place. Once the connection was made, it mostly came down to having a near flawless business plan. Now it seems that angels are everywhere (they even hold events where you can go in and make your pitch to a group of them) -- so while a near flawless plan is ultimately still a requirement to be funded, a lot of effort also has to be focused on grabbing an angel's interest initially and on separating oneself from everyone else who has a proposal. Some of the tools to do this are:
              1) a succinct traction statement (that sums up in one or two sentences what the business is about and why it's a great opportunity for an investor);
              2) a powerful executive summary of your business plan (written like a marketing piece, except with compelling facts rather than "fluff" or hype);
              3) two well-prepared pitch presentations (a 5-minute and a 10-minute version of your proposal that you can deliver in person).

              You obviously have to finish your business and marketing plan before you can write the executive summary or prepare your pitch -- so I guess the essence of my advice here is to allow (and take) the time to do that once you finish the plan and before you start "shopping" it to potential investors.

              I relocated a business when my mother was terminally ill, and understand at least some of what you are experiencing with your father-in-law's illness. I wish you and your family the best.

              • Re: Venture Capitalist/Angel Advice Needed
                RocVigilante Wayfarer
                Video games-this is my childhood dream too! I know 2 things about this business: you need about $250,000 to develop it and it is very difficult to commercialize it. Be very careful, you might end up with a lot of money invested and with no buyers. It's a difficult industry and you have to think on long-run.

                Good luck!
                Roc
                  • Re: Venture Capitalist/Angel Advice Needed
                    DJM0231 Wayfarer
                    Thank you for the responses.

                    I used SCORE quite extensively when I was forming my current business. They have a lot of great tools available to the small business entrepreneurs out there.

                    My business plans and marketing plans are developed in a thorough and concise manner. I could not in good faith provide those documents to a potential investor if they were not. I am expecting to spend a couple months in developing those 3 documents.

                    In regards to video games, the marketing plan has to be very dynamic and publisher dependent. For example, Publisher A may provide most of the marketing and funding to help with the development of the game. Where as Publisher B may only provide the methods of distribution.

                    I guess I should rephrase my initial question. In regards to Angles, what type of Return on Investment requirements can I expect? Will they expect that return in one year or five years to coincide with an exit strategy etc. How would you recommend contacting an angel.

                    Thanks again,
                    DJM

                      • Re: Venture Capitalist/Angel Advice Needed
                        Lighthouse24 Ranger

                        I think I'd seek out a "business incubator" group that specializes in developing and investing in original creative property like video games and graphic novels. Such a group could probably provide you with very realistic ROI and exit strategy expectations, and might also connect you to peripheral businesses that specifically serve that industry (and that could help make your early stages of development more effective). I'm sure the trade press for the video gaming industry knows exactly who/where these groups are, and most of them are probably eager to hear from independent developers with genuine new ideas.
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