Panel: Inside the Dragons Den - How to Talk to Investors

you right so we are talking about inside the Dragons Den so we're going to talk about the hottest topics faced in the industry right now advice on approaching investors common reasons why investors reject projects and teams and how to get a positive reaction from investors so let's get started could each of you introduce yourselves and talk a bit summary of the specific types of funding you're involved with No so my name is Sarah Sadiq I work with STB as TV's the VC fund based in Saudi we have five hundred million dollars under management and we tend to as

imagine that panel or in the talks earlier we look for companies that have potential to go to 10x large-scale my role specifically I work with the investment team and I lead the gaming the gaming set my name is Lyle possum I'm CEO of the innovative startup and small and medium enterprise fund the Alice's I've enjoyed them it's a fun that is owned by the World Bank and the central bank of Jordan we invest in technology companies in general only two areas we don't invest and we don't invest in construction we don't invest in heavy industry we look for companies that have export potential job creation potential and 10 to 12 X exits yeah I'm Peter for

Parliament one of the three partners it's a london-based company called triple dragon and we are specialized games investment and finance company and we're not a venture capital firm most of the investments that we do are loans that we provide to game publishers game developers in order to help them sort like scale their games so mostly financing marketing and user acquisition budgets we also do on a limited scale project financing and very very exceptionally we've announced one last week we do some studio investments but we have to be absolutely in love with it so our core business is is lending not sort of like studio hi I'm Sean from wargaming I'm the token Asian on this

panel make it more international wargaming is a game developer and publisher actually based out of Cyprus which is very nearby but with 20 offices around the world although we're game development publisher we've found a lot of success with some of our games and we've really making a conscious effort to invest back in the community so we invest very heavily in our industry in terms of studios and various technology companies that operate in our space unlike some other firms we because we like to believe we have some expertise in making games and and publishing games we are we we are more comfortable with risk so we're happier to engage with and interact with and invest behind companies that maybe earlier in their growth cycle even pre revenues pre profits those are comfortable for us right so I've got lots of questions if anyone has a question at any time just

put your hand up but I we'll go through my questions unless you have one and I would much rather hear from you guys so please chip in so what sort of companies have each of you funded recently a example of specific examples of great but what I really want to understand is the kind of companies that you've invested in what sort of things you're interested in sure so as I mentioned you are a VC fund or sector agnostic we haven't made is this working okay we haven't made any gaming investments quite yet but we invested in Kareem we invested in nunik Adam II which is an education platform we invested in proof which is an advertising enabler and we have a couple of investments in different and other different sectors like media and healthcare much of anyone here is familiar with visita so our companies are usually startups they're in their growth stage they established

great unit economics in a market and they're trying to scale either within the same country or across the region the ISSF has made three investments - - in companies and one in a VC fund we act as if under funds and venture capital for me one of the companies we invested in as a company called blue thinking mines it's an education company and the other one is an e-commerce company in design company called Michael the fund that we invested in as Asus 500 ov2 Oasis ventures into here and well I as I mentioned most of our investments are loans and we don't disclose those but our studio investment that can tell you a little bit more about that that's an investment in in a Danish studio called the invisible walls and the reason why we invested in them was well we really love the team and we love the product because they have a clear vision of

making a game that is really different and a really innovative kind of game genre so they're doing what they call sort like social strategy based game PC console multiplayer all with all the gameplays would like developed around proximity-based voice chat which is really fun to play ever tested it and yeah well give it a year and you'll be able to play it unrelated I really hate boring talks and I hate boring panels so just just jump up raise questions it's not a big group so I think an interactive conversation would be a lot more fun we're in the interactive entertainment industry it would be it would be silly for us to have a monologue sitting up here in the front having said that I can give you two examples of the kinds of investments we make at wargaming one is a studio we acquired in London they were formerly called HK schemes they made a spaceship combat battle free-to-play experience

which was cool wasn't wasn't very successful but they made a great attempt as a team for you really love their hearts and so we acquired them to have them work together with wargaming on a bigger project so we're currently building up that studio spend we branded as working in London hiring if anybody wants a job we're hiring there another studio is unannounced but we've actually made a couple of investments into them they're a rising star triple-a studio that is still quite small you will hear about them in the coming year or two based out of California rock star team consisting of members from Blizzard and then riot and whatnot you will see their game announced next week it'll be a big announcement and and they're gonna be a flagship title for the upcoming new console generation we'd like these two kinds of teams because the first team is really a team that super-hungry may not

have delivered success but we feel there is a synergy we can find with them that's why we believe in that partnership and we go invest behind them the second company they're just amazing on their own so we invest behind them because we believe in their independent ability to find success but we're always there to try to help them if they if they seek help so obviously you're all looking to make a financial return and hopefully all your investors will but or funding well but is there other criteria that you have that you're interested in you know what is it apart from making money that makes you want to engage and are there other criteria that you specifically have that you have to look for I I mean you see fun so eventually at the end of the day we have fiduciary responsibility to return money to our Althea's but so uniquely as TV our LP is STC STC is the biggest telecommunication company in Saudi so there is very clear strategic

strategic element in looking into gaming so that could be one potential non-monetary return that both the game the gaming company us and hopefully the gaming community in the region can benefit from but yeah we see ones really care about returns the ISSF because we are we are a VC fund but we have somewhat of a developmental mandate so employment creation is very important and gaming is an interesting vertical to look at because it integrates a variety of different components a storytelling graphics animation interactivity music things of that sort so that we find that to be very interesting because it goes into multiple multiple other sectors we also look for the ability to generate

jobs for women and as I said a gaming is also very interesting to us because of the fact that it crosses borders easily and can create exports and from a developmental aspect for Jordan this is something that's very important to us and we are fairly pragmatic must it we don't care that much about the game genre or worse off like platform type and although the reality is there's so many mores of like game developers asking for funding then that they're sort of like funding available in the market so as a rule we we do ever all we need to every game that we fund and if we don't like it we don't fund it but that's what like as far as we would go you have a good job the thing the thing I personally look for when we're looking for investments or companies investment is I'm looking for drinking buddies so if they like to drink that gives you an

edge in terms of getting an investment you think I'm joking no but we have actually having having said that would you like to build friendships in a meaningful way it's partly personal but professionally I think I think it any any developers the relationship you have with each other and with any partner is critically important in our industry because we're not dealing with like machinery in factories and and and it doesn't matter whether person a or person B does it matters a ton whether person a is there a person B is there so from that perspective although I was kind of joking about the drinking part we do need to build extremely lasting personal and professional relationships with all the people that we invest in and in some ways going back to what you said we almost don't care as much about the individual project or the game or the genres as much as our conviction behind the person or the group of people that's behind that company drinking no I

leave that to you no but the to try to make this more interactive one but but one of the things that we look at is not just the technical competency of the people but also their willingness to to develop management teams around themselves a lot of the companies that we look at are very heavily technical and they're very good maybe a developing product but not very good at going into the business aspect of it and we think that for the for the longevity and the the longevity of the company or in the investment because venture capital companies make their money on exit so they have to have something of value when they leave and that value is unlikely to be only technical so it has to be technical and the creation of an institution so I think this is something you should be thinking about very seriously any questions yes oh yeah

we've got one over there can we get the microphone so I'm from Saudi Arabia we were considered new to the gaming in this industry so I've noticed that there's a lot of game developers that are making games by themselves solely as you're still learning so it felt like it's an it's an obstacle to get an investor investment because you know there is no team and do you have also give a you know help solo developer to find you know partners to make games if I could have a first shot yes we do I mean we see lots of projects games and studios that are really really early and some of them are just too early well say well it's too early but maybe go talk to him or her publisher or

another developer who can help and and that's one thing that you will find in the games industry people are a lot more open to help call it comparators than in any other industry and so yes we sort of like send people on or help them and I was about to say when are the questions we don't bite we have been people in the industry are really easy to approach so if you have questions don't want to ask them here find this later at one of the drinks or the parties or whatever and because helping developers early on is is very very important and likewise if developers are looking for well we're trying to do a game but we don't really quite know how to do it come talk to us because we also have sort of like call it site projects where we have games that we're doing a port or a reskin and we'd like to get some new developers involved I mean that those could be very suitable for like call it first-timers and and and that's a shoma

saying there's always companies hiring so always have a chat and that's the best way to help oh it also depends on the the level of financing that you're getting if you're dealing with very early people very early funding angel funding you will get some money to be able to develop your product but as you go through progressively more advanced stages of funding okay you need to find the funders I think need to get more involved in helping you develop an institution and one of the things that we're doing at the ISSF is we're trying to differentiate between stupid money and slow and smart money because stupid money will give you money and they won't do it they'll come to you after twelve months and say ask you what you have done smart money will give you the money and say we think you need to fix this you need to work on this you need to work on this you need to work on this at the end of the day what you developed is

not the technical part really will probably be less than 30 percent of the value of the company it's the ability of the company to continually grow develop new products and whatever and all of these are managerial managerial capability is not technical it starts technical but your company evolves very quickly into an institution that has to have structure and management and discipline and things like that and that's where the value of the company actually gets derived as you become more mature actually I just realized I'm in Jordan I drinking tea when I said drinking buddies just for the record for the camera I want to clarify that she says well actually to your questions specifically and I'll make a general statement but specifically to you I think you have a significant advantage being a developer out of Saudi Arabia Saudi Arabia is an amazing market as a single country it's an amazing market

that GCC markets are it's super interesting even for more international developers and publishers don't obsess over wanting to be the next supercell wanting to make a game that's going to entertain everybody in the world I don't think that that that's an S Ilan that is very difficult more should you necessarily aspire to be that if you can be king of your Hill in Saudi Arabia or GCC you can be a billet you could be a billion dollar company I was talking to Jeff over there leading company byte dance tick tock you should go I'll talk to him after this I was telling him Saudi Arabia is an amazing market I called it the Japan of the Middle East Japan of GCC in the sense of the size of the market the revenues per users the engagement the conversion its incredible market if you're talking to me as an investor if you came with it to me with a pitch of I had this amazing game that's gonna appeal to the GCC markets or Saudi Arabia that will be

super interesting for me as opposed to oh this is another class where y'all copy that I'm gonna try to go fight with supercell over if that makes sense I want I want ten percent if you do that any other questions in the audience yet Oh yep this is the easiest panel I've ever hosted hello hello b-before it is certain Western again you need to see what our prototype about it again typically how large is the Spartans again I'll go first I don't think there's a formula per se we've invested behind almost literally a back of the napkin concept this is what we're gonna do and to be fair it's because we believe in the team behind it sometimes it's a very elaborate playable vertical slice and we still don't invest because we don't have the necessary conviction behind it so there's no formula but I

think you're asking the underlying question trying to ask I'll give I'll give an answer to is if possible within the constraints of your time I would encourage you to have early conversations with all possible publishers and investor to the extent your time allows initial relationship building keeping them updated on the progress you're making showing them the bits and pieces that you have are promising them something that for example will have a playable in three months reaching back to them proactively say by the way I told you we're gonna have a playable in three months here if you have a chance please take a look these kinds of ongoing dialogues are probably the best way to build bridges build build relationships and ultimately get the funding or publishing that you would need and forfeiture pádraig and we would like to see something that is is is playable at least so if like an early stage so I'm and the reason for that is really really simple we want to see that that the team can deliver a solid product and also we

want to sort of like see the game do we like it do we think people want to play this and and also it gives you sort of like the opportunity to look like test it on players get some really early feedback and if you are earlier states and you have an idea as John said I would say do reach out to investors and and publishers if it's about a concept and because what we also see very very often sadly is we see so many projects that are playable or even completed and I would have preferred that they would have come to us over like 12 months earlier we want to make a game in this genre and if we would have asked the question well who do you think your target audience is they would have said well ABC and why are you meshing dis dis in this type of gameplay I mean we see a lot of sort of like confused concepts

unfortunately that's the harsh reality so I would say if you have an idea try to test it on people from within the industry do they think it has mileage that there may be completely wrong they may sort of be overseeing the next sort of like candy crush and but they will also be able to flag up a few things that will probably not work and that can be very variable information because it will save you a lot of time and money and the use of my focus on the next big thing yeah I guess like from our point of view we really look into growth stage companies so by then we like to look at the metrics monetization sustainability but also like the forecast and like based on previous performance how can that translate into even better future results so probably post post prototype at very early stage development at very early

stage development you're not only showing the idea of the game but you're also showing the holistic and the complete capacity of the team to put something together so even if that game doesn't work if it is really good then people will know that you can do something else if you get the idea right so there's when you market that it's not just the game that you're marketing you're also marketing the team that that you have with you because we invest we as ISSF invest in in a team in a company not in a single product thank you any other questions yep oh right hello thank you I want to ask you mr. lathe what support does ISSF offers for female game developers since you said you you are supporting a woman and what how can it help arabic content making about

games on internet and do you have can you offer for them accelerators or mentors to help them to move to the next stage in their work these are very good questions the first two investments we made our women-owned veneers so the first tool companies we invested in are owned and managed by women okay and but they have to be of a specific size the the funds that we invest in Ana we're a fund of funds so 90% of our investments go to create new funds in Jordan so from here till the end of 2023 we have to have created between nine and twelve new funds that will that will do this and any women are as competent as men and in many cases or maybe men are sometimes as competent as far as women

when you're asking about what support do we do we don't give direct support to women we would consider investing in a company if it is what they call Post Minimum Viable Product which means that you have you have sales and you're looking for money to expand so whether you're women-owned or men or doesn't doesn't make a difference but you have to have that that profile and a part of the funding that we have available we have funding that is going to something which we call enhanced entrepreneurship development program where we give what they call investment readiness training for people this is being done with I park in Jordan and we have something called BDS service provision which is we we will subsidize and pay for consulting maybe IPE registration things like this

through I park that's one thing that's open to all to all entrepreneurs there is a quota that I think 35 percent of the people that go through investment readiness training should be women so there is that we also have money allocated for supporting incubators and accelerators so if there are any incubators or accelerators that want to focus on gaming if that incubator or accelerator comes and talks to us and asks for some sort of monetary support we might be able we might be able to do that as well but any nothing specifically for women entrepreneur development it's through things that we have to create thank it was another question here so if I provided everything that you needed for me to invest or have me as an investment how long would that take to get the approval

or to stop the actual investment well I'm as we learn this in our case it can be so off like start to finish anywhere between so like I would say three to five weeks equity investors will take longer but that's understandable so yeah that's our process also we're three partners if two like it we'll do it but that's how we work yeah this is a really good question so I guess the talk before this I mentioned the steps of VC funding specifically so the process is we meet the founders if the if the companies the right profile if is the right fit we move to the due diligence stage which can take a long time depending on the company depending on the industry because like I'm my background like I'm not a game developer so it takes time to

kind of understand your business understand the market and understand the defensibility the mode and even though work with the founders on thinking of the long term so that can take a little bit a little bit longer and I was just gonna say I realized you cannot pronounce late this organization halfway through and pause it would sound very weird sorry no all I was gonna say was um similar to my answer previously there's no defined cookie cutter thing I think generally any any competitive investor will want to be as quickly process it as quickly as I can sometimes it's it's literally a one hour conversation and decision can be made and some sometimes after the initial conversation it could be many many months until some kind of a either decision or action is taken so there's

really no to find answer but I think that's what you should walk into it in terms of don't be frustrated when things don't move as fast as you think they are because all of these people here are looking through hundreds of investment opportunities every every year so don't don't don't be happy don't be impatience try to think from the perspective of investors and what they're coming from but what I would say from a tactical advice is do inform the people you are talking to about your timeline for example you need funding by this specific period because there's something specific concrete that you need by then or somebody already put a term sheet in front of you and it is it is it would be nice of you to inform the other people by the way just letting you know I have a term she that is in front of me if you could kind of expedite your process out beautiful those are always helpful guidelines and yeah actually I might add to this one I've raised the

best but I've seen a lot and I think the fastest I've seen equity investment done is five weeks from first meeting to signing as in the money wealth money being in the bank the longest I've seen is under two years but more than eighteen months and I think if when we get people coming to us like we always ask about the timeline if somebody says less than three months I get a bit nervous in the sense of I'm not sure that we can get a week you know I'm not totally confident then we'll be able to do that if they say six months then I tend to think okay this is like a reasonable timeline that you know it's just to give you some idea and and also it's it will make investors a bit nervous if you so like start approaching them two months before you run out of money because it's not sort of like the best sign of commercial talent I mean you would want to invest in someone who thinks ahead a little bit longer than that in our case we've

mapped it out there are certain things that we need to have for us to make an investment but assuming that we have everything that we need we think it will take three to four months one of the most important things that we requires we do not leave investments so you have to come to us with a lead investor and what we do is we only validate the due diligence that they have done and the reason we're doing that is we're trying to create a new culture of investment in Jordan by doing this to make sure other people are going through the proper the proper due diligence both commercial and financial and legal and we just sort of checked the boxes have our lawyers take a look at it now with that said just to give you an idea we have a hundred and twenty eight companies in our pipeline only eight of which have ticked all the boxes so we can only look at 8:34 of

which are missing a lead investor so we try to help them find investors and they remain there are pre minimum viable product so they're to early stage for us so we have 128 that came to speak to us of which only 42 are things that we can look at in the medium to short term yep hi is it okay to approach multiple investors at the same time yes actually yes I mean I would say it is fine and in quite a lot of cases investors don't mind sort of like teaming up it sort of helps of like sanity checking and if we do a project financing we'd much rather have a publisher go investor on board

and then same for studio investments I mean not not necessarily I mean I don't think it's required to do so and if you speak to investors who are like game industry investors and quite often I they will make some suggestions have you spoken to him or him or him because you may be approaching a VC whose ticket size is sort of like too high for your project I don't say we'll go talk to him more so if people ask have you spoken to someone it's usually sort of like best practice to be sort of like open because they're trying to help but it's not like required to do so from the outset yeah

and I guess one way to think about this is that this is all like one big partnership so the investors are partners with their founders and then the investors are also partners with Co investors so and that's for instance as TVs minimum ticket size is five million but we got a lot of really really good founders that we believe in but just because of the fund economics we can't we're not able to find but we have the right and that's what to say well this investor makes sense now but please let's keep in touch and talk it in a later stage it's all it's all about having a conversation communicating with also that actively building a solid ecosystem where everyone can can grow you have to be careful when you speak to different investors what their limitations are we've had two companies that we've spoken to that they went and spoke to other investors we're very happy that they were but when they spoke to the other investors they raised the capital

around beyond what we can invest them so then we said I'm sorry this has gotten too big for us we can't invest enough so you have to understand this just just a minor tactical advice I would give there is you don't have to open the kimono to everybody I think it's as a Curtis you can say by the way we're speaking to other investors along those lines are fine that once again depends on your relationship if you have a really good relationship with a particular investor you can it's up to you to be open like by the way we're also talking to fund a or Company C right that's really up to you one thing I would encourage you or strongly tell you not to do is don't play Hollywood banker don't be that where you rely well that other guy said they're gonna do this for us what are you gonna do for us like don't be that because that turns people off any sophisticated good investor will be able to see through you right away remember you're the first time doing this other people have been doing this every day for like past many

many years right so don't be that Hollywood banker the more genuine and true you can be to who you genuinely are if you don't have a lot of business experience just state it like we're very good at technology or game design we're just not the most savvy business people out there be open with that and and nobody's going to try to take advantage of you nobody good will try to take advantage of you they'll end up owning owning a problem if they do because if if I invest in you for your technical skill only it is my responsibility for my investors to help build your come any our company for it to start having good administration and management and if I don't I've contributed to your failure and my failure right we probably got time for one or two more questions all right I will ask one yes right and I think actually I will ask my last question

what is the one thing that you'd like people to leave this session knowing that they might not known before from my point of view you start off technical but you end up institutional and I've spoken to a lot of entrepreneurs Oh tell me that I'm in my Series B or in my Series C capital raising and when I look at the institution or lack of an institution they're actually a seed for the third time or Series A for the second time every time you you go to market to get money when you finish it when you finish the money in you're gone before you go for more make sure that you can show an evolution a positive evolution of management within your company if you don't then you're still in that same

category you've just spent a lot of money playing around with technology and that's not what the investor is looking for I have a question for the audience I came to Jordan for a reason because I want to understand the market better I've been to Dubai for some other event sorry sorry [Music] understand the market better but question to you those of you who are from the region what is your biggest pain point or challenge or problem as you're trying to make a name for yourself in industry I really genuine here just shout out like is it like we can't you can't meet investors or we don't know how to reach somebody or can you just shout out like some of your biggest problems or challenges what do you need elaborate please

so many Cowboys hmm interesting Saudi sorry we have accelerators in Saudi but there is a gap between okay how do I go to them so for example I can reach them but I get and not uncertainly me but they a lot of a lot of people who try and pitch their projects fail when they go to an accelerator so you have people who have projects or ideas and you have accelerators who are looking for this for these people but there is a gap of how can we communicate or what what are we missing that we can work on or put our time and like most of you said that most of us has the technical part but none of the business or anything else

and I think that's our biggest issues how can we turn something that we're good at into a business mm-hmm I can only say that it's just making games alone sometimes isn't enough sometimes you know how to sometimes you have to know how to prepare a deck sometimes you need to know which checkbox is detected sometimes you need to know what to say to an accelerator an investor or what not to say I think there's I agree there's the gap probably should be addressed through some sort of a Industry Association some mentorship some people with experience maybe some phony some folks from outside of the region who can come in and share some of that experience that's one way to address some of that gap I think it's I sort of did the question was a little bit like some of the people here on the panel trying to sort of like tell you something I think it's that's not really going to help you it's about you've got a community of intelligent people here in the region talk amongst yourselves and share information and share experiences

and and I mean it's relatively easy we've sort of like modern technology to do that across borders and and if if I look for example at places like Finland what I see there's work like being different from other places in say random Central Europe and they've got equal amounts of people worse off like well-educated Kinko's can do art they can make games and but they're not sort of like talking to each other as much and working together as much as for example in Finland and it's sort like the creating that open community that sort of like helps to speed things up and it's a bit like I mean I'm not a not a complete soap-like techie but it's like open sourcing can help and the same is sort of like sharing your experiences can help a lot and yeah a game

associations drinking tea in an organized manner it definitely helps because it's it's a creative process and sharing experiences is not to be underestimated so yeah trying to try to do that Sean for you one of the interesting things that we've been seeing at the at the ISSF as we have a variety of funds from the region coming to talk to us we have funds from Kuwait we have funds from Saudi we have funds from from Dubai talking to us they all recognize that if Jordan has it has deep that technical skills but they also recognize that they have better management skills or more much more management so what you'll end up finding is that a lot of startups here once they get the product proven and once they

start getting money coming in a lot of them go to the Gulf where they can find people with good marketing with good the brand management issues with a good product development things and of course its access to a larger market Jordan in the past 30 years has invested the enormous amounts of money in in technical skills and programming and engineering and and I think probably in the next five years you're going to start seeing a move into more into management because we I think as a country we're not as strong as we should be in both in that area not because you're here B is s-sir efforts like this is gonna make a big difference right I think we're gonna have to leave it there thank you very much to panelists and to you guys thank you very much [Applause]