Presentation given at game seminar 4.9.2012 at OAMK. Talks about investors different business models and their wants when looking at game companies as investment target.
3. The Team
Partners Board of Directors
Matti Kanninen Jukka Mäkinen
managing partner Chairman of the Board
Juho Risku
partner, co-founder Jari Pasanen
Member of the Board
Antti Kosunen
partner, co-founder,
and Board member
4. Investing from pre‐seed to follow‐up
Unqualified Qualified pre‐seed/seed Qualified expansion Financed – Exit
Accelerating
”TechStars”
Scouting Go fast forward Operationalization Follow
or fail fast
Scope of main interest
StartUp
Proof of
Idea Basics Preparation Scale‐up
concept
15‐90 k€ 200‐400 k€ 1‐2 M€ xx M€
Financing
First time Follow up
Investment Exit
Investment
Σ < 500 k€ Σ < 2.5 M€
10. Exit driven model
Cash from stock sale
Expectations
Exit 10 * Valuation
Investor
• Money
• Expertise
Investor
• Money
• Expertise
Cash flow
Company Valuation
11. Exit driven startup
• Has a very large market potential
– Most of the potential not realized in a form of
positive cash flow at the exit
• Is easily scalable, usually globally
– Smart customer acquisition logic built into
business model is a plus
• Has strong IPRs or a business model that
accumulates value over time
– Customer retention can be clearly articulated
12. Cash flow driven model
Product launch End of life
1‐x% cash flow
Company
• IPRs (value)
Product x
• Money
• Expertise
Investor x% cash flow = 10 * money invested
13. Cash flow driven product
• Requires less capital over life cycle, can accept
more market behavior related risk
• Has well defined, easy to understand product and
clear simple business model
• Has short time to market
– Straight forward development, no technology related
risk
• Generates large positive cash flow fast
– Has short sales cycle
– Are usually consumer market products
15. How to choose the right model
Exit driven model Cash flow driven model
• The grand vision is large • Company is based on idea
enough to fill the purpose of multiple products
of the company alone • IPRs are mostly creative
• IPRs are patents or content based and different
accumulated during longer in each product
period of use (information) • Founders like to keep the
• Founders ready to sell the options open for future
company or IPO is a realistic • Successful product can be
option used as a future reference