Super angels in the games sector

[Music] great to be here and it's my very good and old friend old Pauline and you could say the same about me I'm David Hudson founder of unity and and quite active angel in the last few years but actually Paul has much more experience investing in game companies than I and I think we're supposed to talk about investing in games yeah which is a passion of ours and something with how long have you how long have you done it I have been investing in game companies for nine years well I've been working with game Cummings for 20 years and I've been in

the game industry for like 16 several years of the basements don't really count so there's a topics maybe we should do we should cover but I don't know what do you think yeah I think um I think because David and I have been you know writing our own checks in game companies you know we got asked to do this panel and just want to sort of share a few thoughts share maybe a few examples maybe a few tips at the end about you know why you know why you would want to get a super angel in the game sector you know what they're sort of generally looking for you know maybe what they're not little rakes without the most yeah what they're not looking for you know how best to sort of reach out to us or super angel in general and

maybe just share a few examples of things that you know we thought were really good or really bad and you know I guess sort of a big thought is his or idea is that a lot of the game companies obviously go out to raise money and David and I were actually talking about this earlier I was like actually going out to raise money is one thing but who you go to raise money for is a whole nother thing and you know not every game country should actually go out and raise money because you bring up a lot of different implications one way I think about it is that you know I really love the game of this tree in fact you know my whole career feels like it's been like a love letter to the game industry but but but I think part of some of that love is you know when you start investing in a game company you

force it sort of to think of itself or be caught investment object and not all Studios not all teams really are like living up to that or like should try to force themselves stuff to do that and I think things gonna go pretty badly when when you win when when when when companies that really don't want to build a business or build a scalable business and still try to raise money yeah cuz it's it's a good point cuz you know your ambition or goal could be very different from what you know we're looking for and actually why are we talking about that sure sure yep and it sort of I have a investment thesis which is has a couple of elements that are not so important but the last one is it's my children's mommy so which which you know it really is because you know it's sort of what they inherit or not so so basically the logic is you know even though I love something even though even really like the people if I don't think it's gonna make money for my kids I I just probably shouldn't do it which is a bit of a forcing function to

avoid sort of things that are like just just lovely or cute or interesting but yeah so no let's see so so so when you go out and look for game companies the rest by the way which stages do you work out so I'm investing you know from time you should push the fund watch just watch the firm and we made a few investments but you know basically investing you know from time our company actually gets started all the way up to the sort of very late stage you know you know companies are worth like hundreds of millions so and so I'm more than just an angel now I'm back as a VC but even when I was an angel that's what I was I was looking for but I think generally you know I'm looking for founders that are incredibly ambitious that want to build something very big

and they wanted they want to do it because they're passionate about the idea and the team and everything they're not doing to become the next billionaire because anything that lets you sort of think that that's not the case becomes a red flag yeah anything there were it's like unclear like whether they're even like each other or whether they really care about the product the give us money and then we'll make something like I said like I haven't actually built anything yet like everything everything that takes away from these kind of smoking big and they're kind of already moving becomes a red flag I think yeah I mean and in people that are going to give their all to the to the business because you know doing a start-up and you have to be prepared to make massive sacrifices or compromises because there's gonna be horrible times is gonna be great times and there's times when you have to be working late in a Saturday night or you have to go borrow

money in your credit card or god knows what you got to do are your friends yeah and and you know and so founders who and then again it's thinking about founders who are gonna have the ability to sort of pivot or find the right opportunity to really go after because how business starts is not the way it ends up and you know as David said you know sometimes there's tough decisions where you got to fire people fast but you got to find money fast where you got to find customers fast we go to generate revenue and the sort of the speed of decision making and how you really think about things is is incredibly important you know it's a missing of coming to founders who really want to go feel something in very ambitious can make decisions very fast cuz there's you know

it's not the money that that is the limiting factor it's it's the time money gives you more time that's what I see and so you got to be so we look for great founders idea you know who done companies before but you know that's not a sort of criteria either way but people who really want to build something big so you know when just pitching one game is is sort of less interesting pitching the vision for how you want to build a big business is a lot more interesting and I think I guess talking about why you would want to get an angel and how you might want to get an angel and how you sort of build in this syndicate support of raising some money so you know typical seeing round these days is probably between sort of one and two million dollars you know not many angels are going to write checks for that size

so you have to put a group of people together so it's not about necessarily finding the person who writes the biggest check find the person who's going to bring the most value to you in terms of helping to put together that round helping you to going to be able to help you with your business you think about your product helping your recruit helping you to find partners I mean if you're building a game fit with Apple and Google how do they think you know how do you think about you a and just all that stuff I don't know like I mean one thing I look for a sister Cecil like these are cultural products and you know it's it's I see a lot of stuff like you know maybe because I you know came up through unity and and helped build that I see you know just a lot of people that are building interesting things and they're really smart and some of them come and they

show something that's very smart but it's not it doesn't have like energy or love or it's not weird you know sometimes you feel like somebody went off a checklist of how to build the game as a service and it doesn't you know doesn't def differentiator so so I pass on a lot of things like for that reason differentiation is really important I mean but it's tough because like yeah I don't know so you know why is whatever you're going to do different why are you going to win yeah yeah there's no disability and like people there's a lot of products out there yeah if you're talking about game development I mean if you're gonna build a strategy game I mean how you gonna win against all the other strategy games out there yeah that's essentially what you're competing again yeah how you gonna be able to recruit great to raise your next funding round I think David and I both agree

that you know we have to see those the potential for you I actually believe that you can do those things otherwise putting money in it's just is that it's basically crazy a lot of the stuff fails yeah yeah you know we know that you know we're gonna have to write off money sometimes that's part of the business but it's trying to find the right ones they're gonna be able to really grow really fast is what really matters one of the things that I I I wrote a little blog on but recently it's just sort of that initial communication with an investor I'm always amazed and I continue to be amazed that you know bad news will put a little so much work and it's sort of putting the team together division putting a duck together and then they send a message from LinkedIn it's like hey I'm building mobile games cause india dekh like really why is that

what's wrong what's wrong what's wrong with LinkedIn besides the shitty software well yeah that's a whole nother story but anyways this is you have to sort of be able to grab my attention because you have to realize that I probably got it up like 30 other emails and messages like that I'm probably deleted all of them because it's like yeah there's no differentiations you have to be thinking is like what's gonna get an investor and a version of that maybe you know is that you get this little message somewhere the deck and you open the deck and there's like three different games and like you have you get the distinct sense that none of them have been made but somebody's hoping that you sort of you pick one for them again complete lack of with us this kind of lack of like necessity yeah yeah yeah and so and going back to sort of reason to get you know a super angel in the ground is is that I guess you know David and I both been fortunate with you know our past or you know school we have you

know David has done very well with unity some of his investments I've had a pretty good track record as an investor so you know when we say all right we want to invest in a company and then we start telling some other investors then we tended to you get their attention so that they're at least gonna look at it you know there's obviously no guarantee that they're going to and then it helps us then start sort of billing a group of investors maybe you get some more angels coming in and you get some smaller VCS coming in and it just comes together because it's really about sort of that the value and the inside of that group that really matters so you have to really think about the people that you're gonna get to invest because you want to get the smartest people in the room not necessarily the people with the biggest checks in the room because that's what really makes a difference yeah and you know just other things is

can tell us about like tell me about like a recent deal you did that you were happy with very kid-like was something clicked right yeah so let's say okay so Arlen's I was introduced to a founder in LA who was building interactive game shows on mobile you know as a stream within the app that's kind of cool and I just got off the phone with someone who's gonna do that but for abetting games and I didn't really believe on that because too many regulations to stuff so I got a phone with this guy and it's just like I just think you know game shows on mobile apps this makes a ton of ton of sense and yes

he's competing against HQ trivia which every you may have heard of but you know they're burning like a million dollars a month this guy is bootstrapping it more he sold his last business you know made his invest for some money it's like it just just sort of it was checking a lot of bauxite excited and the guy was just honest he just you could just feel that sort of honesty over the phone and then I ended up meeting him in person and I ended up doubling what I was going to invest in it and doubling in my commitment to invest just because I met the guy in person and you had that sort of interaction it's just like that's the power of being in person you know particularly if you can sell yourself well in person is is you get you get that much more personal connection you know that's why is the best way prefer meeting in person I think that's why you raise money you should prefer meeting person kept doesn't always happen but

you know just getting that and you know getting excited about the opportunity and everything was really good versus sometimes you know I'll meet founders that that just haven't really thought through why they want to build something how are they going to become successful how are they gonna get users I mean it said but I meet so many game developers that just don't know how they're gonna go out and get users and if you don't know how to get uses how you gonna build a business because the key skill set at the beginning and not expect that you're gonna have to go and hire all those people so maybe it's like sort of a like sort of unusual one it's raw fury which some of you may know it's a it's actually a games like I said about what he called a big premium game publisher for grown-ups I guess you might call it it's a it's an

old friend of mine it's a Jonas after son like he's had a long career in games he did something on Facebook when that was a thing and then it did some other mobile stuff or whatever and it always felt he was checking boxes like he was working really hard he did some good work by the way and it wasn't actually completely unsuccessful although it failed eventually that is more like felt a bit roped then he worked for paradox for a while where learned a bunch and then at some point he came out kind of with the thing he wanted to do his whole life which is just you know very serious very kind of hardcore games multi-platform premium maybe with DLC but still kind of not not the modern model and it just felt like he was at home like he just you know it was so much his heart in it and like it's just got this gathered this momentum there was no way of stopping this guy so at some point I of course I gave him some money and he's doing very well not obviously like a sort of a venture scale kind of business but it could be

and and if it doesn't right for a few it could be eventually that so just you know yeah just somebody with a real hard thing to do um we've got four more minutes is that anyone who wants to ask any questions very quick hands so I feel what is your thoughts on VR and AR at a moment so much like it's so slow just killed me already like I love these formats I really do but like there's no users even my good friends who have even broken even with their projects you know I've left it now the CCP I believe broke even or maybe even made a little bit of money but that's not enough for a you know successful game company other people have yeah I don't know my thoughts is I've never invest in VR I have no plans to I have AR I'm a much

bigger believer in it yeah only because I think the consumer experience will be much better once you have like just a normal set of glasses that can give you that AR experience but we're so far about if we are so far from that but it will come and or even if Els would be served up in contact lenses at some point like like four years ago I was telling people like if you're doing VR raise money for four years and then like turned out not to be enough I feel sorry for whoever followed my advice yeah and I mean I didn't have any any of you seen you know there's been what they call the VR apocalypse in the US was all these comes to raise loads of money and they're going bust yeah AR is a lot more interesting to me I was also giving predictions four years ago that you know VR would all be about games and not so much industrial uses and I was all industrial uses linear yeah yeah

okay so way to extend to that question what pleura platforms are you actively looking at mobile PC web consoles it's a good question anything ruling out I think I think it's it's a mix of those I mean not console that's a big boys business not solely not yeah I mean mobile is still good mobile is probably the the single biggest opportunity just because you know so many billions of smartphones out there but it's really about the team and and how big an opportunity that and how are they going to how achievable is it for them to to get there and is it a big enough for opportunity and and and not just necessarily gain development but is it maybe is it a is it a platform of

service it's gonna help gain developers maybe other categories you know like community sure so it's it's you just have to think I mean you just you just and you can you go and CrunchBase these days and say alright well how many BR can companies have raised money in the last 12 months not too many did anyone or you just think about the category cuz you know some are investors gonna ask you those questions yeah Mobile is good PC is good yeah I mean you know what's coming with sort of you know what steam is done and now epics store and and other people is just you know I think PC is gonna become an even bigger opportunity well you think about voice I think voices is really interesting I don't know if you even never where there's like a category emerging of voice games yeah I think

it's it's early days but you know similar categories with podcasts I know podcast companies journey three million a month just all hon percent in advertising so you can generate you can but need to get the users and there's you can now do voice apps just like a game app on the phone you don't have to rely on all the collects the hardware and all that stuff in terms of user base you know playing games by voice is obviously gonna be a different experience for ask us we haven't grown up with it but I'm super skeptical just because I don't like talking to my devices but I mean kids seem to be doing it so yes you know younger smarter people might be able to see that but I mean I I'm I'm you know if it's super early I'm really driven by the founder my belief in the banner can sort of figure things out that's what it really comes down to

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