This document discusses venture capital investment criteria for game companies. It notes that venture capitalists primarily look at the competitiveness of the entrepreneur/team, the market potential and suitability of the product. The game industry is described as highly risky and competitive. The most important criteria for venture capitalists is the experience and ability of the development team to execute. They also consider the potential for long-term profits through continued intellectual property development. Venture capitalists want to see game industry knowledge, a novel product idea, and a playable demo from prospective investments.

1. VENTURE CAPITAL GAME
COMPANY INVESTMENT
CRITERIA
18.1.2018 Ville Valkonen, p. +358 44 56 72 201, ville.valkonen@turku.fi

2. BACKGROUND
The remarks of this presentation are based on:
◎Previous published scientific articles
◎Interviews conducted for a master’s thesis in
Turku School of Economics: 4 VCs + industry
organisation
◎Other open source material
This presentation is a brief overview of the topic.

3. GENERAL VC CRITERIA
According to research, VCs look for:
◎Competitiveness of entrepreneur and the team
◎Lucrativeness of the market (size&growth)
◎Suitability of the product or service
(uniqueness, superiority)
◎Financials (IRR, size)
Acquiring venture capital is selling!

4. GAME INDUSTRY CHARACTERISTICS
Compared to other industries, the game industry is:
◎Hit-driven (most games fail, few become super
successful)
◎Risky and unpredictable
◎Fast-changing, and change is constant (tech,
customer preferences, creative content)
◎Very competitive (massive supply of games)
Many VCs do not invest at all, and those who do, try
to a) mitigate risks and b) seek unique developers.

5. MOST IMPORTANT
CRITERIUM: TEAM
Experience, past success, ability
to execute, passion

6. CONTINUITY AND
IPR DEVELOPMENT
Potential for a long-term profit,
continuity of the business model

7. GAME BUSINESS
KNOWHOW
Understanding of game industry
dynamics, marketing expertise,
metrics

8. BIG POTENTIAL
The possibility of becoming a
“billion dollar company”

9. QUALITY PRODUCT
AND PLANS
Novelty, market interest,
playable demo, well planned
segment, genre and platform

10. SUMMARY FOR DEVELOPERS
◎Strengthen and emphasise the team, show
results and game industry understanding.
◎Plan for long-term success and IPR
development.
◎Target a platform, genre and segment with
large market potential and show ability to
dominate.
◎Develop and communicate novelty, uniqueness
and market interest. Show a playable demo
and some early metrics.

11. “
“It’s not about
developing a great
game,
but building a great
game company.”

12. THANK YOU AND GOOD LUCK!
Ville Valkonen
p. +358 44 56 72 201
ville.valkonen@turku.fi
twitter: ville_valkonen