New start-up? No money? No problem!

[Music] [Music] first of all I just want to thank you know pgc for having me here as a speaker and of course thank you all for coming here this was that's what makes this country so great so some introductions my name is Leo Tatum I'm founder and CEO of Tatum games we created heroes vs. villains which was the first collaborative a collectible card game so we we rejuven eyes that genre and made it more collaborative and with teamwork and leaderboards and gills and raise is pretty cool today we're going to be talking about how to get money for your business I think this is something that every entrepreneur ask themselves at some point especially in the early stages so let's get into it types of

capital first you have your fixed capital now you're faced capital are your tangible items these are basically things that you're going to be using to build your products such as like your computers and other equipment not to get your problem not to get your fixed not to get your things confused with like the things that you actually need to build your stuff so these are all these are things that you need to know in regards to speaking with your whoever it is that you're interfacing with like your banks or whatnot you need to be able to identify that you're doing either fixed or working capital this is another option here so your working capital is basically what keeps you going so these are going to be like you're paying for your your inventory this could be like paying for your wages and salaries and things like that there is there is an equation here that's very important to know and this is just to

make sure that you're not asking for too much money so if you follow this this equation and if you keep in mind that there's a magic ratio then you know exactly how much money to ask for to where you're not overextending yourself and then that may affect your bottom line and then you have your your growth capital and this is more for mature companies so your your already established at this point and now you need to expand or maybe you're established you need to pivot and that's really where growth capital comes into play so so here's kind of the the main question here which is you know how do I find the money to start my business and when we're not whenever I'm asked this question I'm always saying that this is basically a question about what you qualify for and what you are willing to give up to turn your dream into an idea and return to your dream idea into a

viable business no to go into this a little bit further and let me get a little bit personal with you on this so about eight months have to start in Tatum games I went through a terrible event I was married for 15 years and then I got a divorce and it was something that was really devastating especially on my business because for thirteen month guys I just went underground I felt like kind of like Dave Chappelle you know when something happened Dave Chappelle just went to advocate no no one heard from him and that's was that ended up happening to me so after those 13 months I had to get on call with my partner I had one partner at that time and I was just thinking to myself how am I gonna tell him what's happened this past year because I've been gone and as soon as I got on a call with him it was so funny because he started apologizing to me it was like minute and I'm sorry I haven't been around I know it's been about a year what's been going on with

tailing Jay and I was like really that's my line turns out he was also he also went through a divorce and we just both just sorted just went off the rails so we had to figure out what to do at that point so so we had to start thinking about how do we rebuild and how do we rebuild quickly our solution was that we needed to get some help we could no longer operate as just two guys in a dog so we sort of hiring interns that was our first step we got some interns which is something that we were resistant with because we are worried about the skillset and what I tell you guys this was probably one of our most important and best decisions that we made at Tatum games those interns who did really really well better than what we expected and and and the price was right we paid them with flamin hot cheetos so and and I worked really hard for this electable treat so it was it was really cool and and those in that intern but will those

interns is what led us to get in our second investment and that second investment was up to about twenty or fifty thousand dollars and I know I haven't talked about how we got our first investment but I'll get into that a little bit later so angels most of us kind of already know what an angel investor is but let me just kind of put a little bit of more information into how much to ask because if you ask for too much from a firm angel investor you're going to ruin your chances but that the average angel investments about fifty thousand dollars you do have to consider what what is your evaluation of your business so you you know if don't just ask for any random amount make sure that you have intentions behind the amount of the amount of dollars that you're seeking and that it actually matches the state in which your business is in well not another important notice that investors do expect to see a use of funds so so be sure to you know have all

your documentation prepared networking this is a huge thing face to face interaction so going back to how we got our first investment it was it was through this way so before without what I was doing is I will go to online websites and I was trying to find investors online and I was emailing them and trying to make arrangements to see them face to face or to have some sort of Skype call it if it wasn't practical and they were in a different region and and that didn't work too well but what I found out that that worked and and garnish of better results was just going to networking events so if you if you join meetups and if you're going to events even look like this event here just having that face-to-face interaction it's gonna yield better results for you now you can you can't find angels online here's a

couple websites that I personally used and also social medias are also a great source of finding different investors to speak with as well gust in angel geo and and f6s or or everyone should have profiles on these websites here well awesome for some pictures there and then friends and family is probably your best source especially especially if you're in your seed rounds now some of you might be thinking what if this is an option right and definitely I was I was there I don't know if you guys are really familiar with how the adsr was particularly in a Los Angeles area and in LA and well particularly in Los Angeles area but there's a huge drug epidemic and the result is that the people that were born in the eighties like myself we were affected by that I was taken away from my parents at birth

so I ended up being homeless at a very young age so the whole concept of getting funding from family that was an option for me I've never been that cool guy so in it so I also didn't have much friends either so I had to figure out what to do in this sort of situation because everyone kept push pushing and saying that the best way to get some funding at this time was through friends and family and the answer it seems very trivial but when you're going through the motions it doesn't really occur to you but the answer is you just have to make wealthy friends is sound it it is actually easier than you may think and that's actually how we got how I got my first investment of $50,000 it was just was just going through different events I met up I met up with a guy named Marty and I never pitched to him we were friends first and then just went

through our normal day-to-day interaction with each other this was through our one-day interaction with each other Motty actually approached me and said hey I want to be a partner in Tatum games and he offered to pay $50,000 for us so that was our very first investment some some organizations you guys should know about incubators and accelerators that there's so much content on these on these sort of companies you guys can go to learn more but but really I just want you guys to know sort of a little bit of a differences between the two particularly is the time the timeline and and what it is that you can actually receive for them the type of services or perhaps some financing so for incubators is an open-ended timeline and and this really is for beginning the beginning

stages of your company and they don't typically offer capital for you they offer different things so they'll offer you consulting and then maybe you can use some of their facilities and things like that accelerators they're meant to accelerate your growth so they there is a chance that they may give you some money so but the exchange is that they're going to take some equity from you in the end and you also you go through this program through a set amount of time usually three to four months some of the longer ones will last for about six months and then of course you could also use crowdfunding here are some of the more popular sites from Kickstarter dandy go to go fund me that the thing about crowdfunding is that it's incredibly difficult in the very beginning stages right because you don't have a product to really present and and definitely

I've done a Kickstarter before for potato games and it didn't really work out and the reason why is because I was so focused on a product that was incomplete and it was kind of its kind of diary up at all right because the real reason why I went to kick starts because my product was incomplete but then I had to present my product that was incomplete and people didn't want to invest in it so what I would suggest for if you do go this route is instead of presenting your product that's certainly part of it but present yourself we I would have had better results by going on there and saying hey I'm a software developer and this is my company and just presented myself as opposed to the product you know talk about what it is that you really want to do so in conclusion there's there's a lot

of different options you guys I didn't include things like your banks and things like that because these are certainly viable options that you could go into but you know all of these things where you're at when you're first start and you're trying to learn about all the different types of capital is funding yourself angels these are all the things that you're going to be learning about and and I call this kind of like your your knowledge sectors so it doesn't particularly matter where you are in these sectors they're never gonna be full I think the only thing that's gonna be full it is just really your willpower in your faith so you really have to just believe and what it is that you see for your company your that vision and you have to have faith that Bettis gonna work and if you can do that then you'll you'll find some creative ways to make it work and happen for you and ultimately don't get discouraged and indefinitely don't give up because as

someone like myself who's made so many mistakes around me was running Tatum games then there's certainly anyone can get financing and and don't underestimate the power of flamin hot cheetos it's very good thank you do you guys have any any questions yes great thank you much any questions guys anyone wants to start I've got the microphone here I see a couple of hands here yeah thanks for sharing your story if it was interesting what so how much you turning over now at Tatum games compared to the time you were going through the divorce at what stage were you at that stage oh I see what stage was what has changed so so really the a lot of a lot of these things have happened just recently was was was changes we're about 300k richer which is great and we just staffed up to

about twenty new employees and that happened literally in a past month and our product is going to be released in May so we're on a fast-track of really getting things rolling and really making up for lost time well there are other questions this one and I'll think back over that yeah question the back man I think the mark friends on this way okay hello oh you know hello I was wondering if you had any pitfalls downsides to the crowdfunding Kickstarter that kind of thing with the under near advice on that pitfalls yeah absolutely listen kicks running a Kickstarter campaign or any other campaign is brutal and they're gonna be up all night you're gonna you're gonna be waking up in the middle of the night they're gonna bite me this one this one give me money and then you gonna go back to sleep then you're gonna wake up a minute later and like this one give me money and then you

can go back to sleep so so literally won't get any sleep the thing about Kickstarter is that I think that you have to prepare months in advance so I suggest that you prepare at least three to four months in advance start doing your start engaging with their audience immediately as soon as possible and then also you have to I don't want to say that you don't well you don't want to care but you have to sort of you have to sort of realize that that it might not work for you yeah and and with that you'll have a lot less stress while going through the process some some of the pitfalls that that we ran into like I said it was just really what we were trying to present we tried to present a product that it just wasn't appealing enough and because it was so early but you really have to put out yourself so I I would say that if you want success in Kickstarter present

yourself first and then make it your product second until you until you're more established until you have a very solid product I mean I can double that because when we had 40 30 odd articles it created in advance like six videos create in advance and we ended up basically producing like 42 items in the end and about 20 videos you know it was we would completely underestimated rocking our game that we did completely underestimate the amount of effort required and we had what was I was taught by Luke who runs the game site for Kickstarter was one of the most pre-prepared that had ever seen so it really depends on your audience already being on Kickstarter and unfortunately turned out the rock and roll one wasn't so we had to take them there and it's incredibly hard to do that so if you can focus on on top my Kickstarter IndieGoGo all of that is to make sure you understand the audience is already there

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