Investor for MMORPG needed

[Hunnenkoenig]

My name is Attila Beke, I am a lead member of the independent development company „3D Magic Kft.“ and the producer of „Renaissance: Chronicles of Chronia“.

We are developing a very unique MMORPG (Massively Multiplayer Online Role Playing Game) for the PC (Windows) market, where thousands of people can interact with each other in real time - connected to a virtual world with a realistic and dark medieval fantasy setting through the Internet – by controlling so called “avatars” in the game.

Our team is located in Budapest/Hungary and it consist 10-15 industry members who collected years of professional game development experiences by working among others on released titles like Hitman, Warhammer: Mark of Chaos, Sacred or were responsible for the CGI effects of feature movies like Terminator 3.

Since early 2005 we created a detailed Game Design Document, which describes the main storyline and the main features of the game, a Business Plan and a Financial Plan.

We also created some videos - recorded in our own graphical game engine - which demonstrate the targeted mood and the look of the game as well, as our ability to realize a game in a professional quality. Furthermore we are working on a playable technical demo, which should be finished in a few weeks.

In this demo people can create avatars, log in to the game, walk around and chat with other people, who are also logged in and visible for everybody else in the world.

Although we are working on this project so long, we are still at the very beginning, because such a project needs full time attention and a solid funding, which we can’t afford on our own.

Although we already have an interested party, who would invest € 4.000.000 into our project, we are still looking for Investors, who are interested to fund our first office to be able to work as a professional company and finance a highly anticipated multiplayer online game, which generates a solid revenue after release, based on monthly subscriptions and other payment methods.

Similar projects are World of Warcraft, Second Life, Ever Quest etc., which have 150.000 to 8.000.000 subscribers, who are paying $10-$15 / month for the service.

For more information please visit our Website: ::. RENAISSANCE - Chronicles of Chronia .::

If you have any questions about the game, the team, or you would like to see our Game Design Document or the detailed Financial Plan, please don’t hesitate to contact me by e-mail at a.beke@3dmagicbox.com

Waiting for your kind answer.



Attila Beke
3D Magic Kft.
::. RENAISSANCE - Chronicles of Chronia .::

MSN: hunnenkoenig@chello.at
Skype: hunnen-koenig

[rogercbryan]

I've read that these types of projects cost $10M USD and have a 95% failure to return investment rate. What would you do to not be part of that 95%. I personally love these types of games, but I'm not sure if there is room for any more of these games. What would your game be based on?

[Hunnenkoenig]

I don't know where did you read it, but it's not exactly true.

1. Such games cost over $20 million if you produce it in the US or west europe (fortunetly we are not in the US or west europe :P ).
2. It is a failure, if you make a heartless cookiecutter game.

The games, which failed, have been pushed out half finished and/or have nothing new to offer.

Most of these games come from asia, and they are all the same crap with different graphics. They produce them on the assembly line and they mostly fail in europe and US, because different play- and marketing style.

I could exactly list you those games, which failed and why they failed, but you can look for them easily on mmorpg.com.

There is plenty of space for such games oon the market (beside many articles look for example at mmogdata.voig.com), but you must not prroduce the 101th WoW-clone.

Our game is very unique and there is nothing nearly similar on the market yet.
We are aware of the fact, that its' hardcore roleplayer style could not apply to the mass and it's rather a niche game, but it could be still a big success.

Even with a small subscription base, we could make a nice revenue.

If you are an investor, and you are interested, contact me by email and I send you our business plan and calculation, where is everything explained exactly (but if you want to understand everything, you have to read throug 64 pages! )

[akula]

Hunnenkoenig, here's a thought..if you're are the ceo'ing this shop and I was on the board, I'd kick your head in for being ineffective

an obvious database like venturesource.com would list the details of every major us and european mmorpg deal for the last five years; the founders, the rounds, the syndicate and the exits. that's where you should be looking to close your finance, not spending your time posting this stuff on an internet forum

they should fire your ass for incompetence. get ur act together. I can't beleive you're still here reading this abuse with your burn rate. drop everything and log onto venturesource..if you don't know what the other databases are, ask me

[Hunnenkoenig]

Akula thank you for the tip. We are a small group of industry professionals, who founded a company to be able to develop our own game. We aren't a big company or so.

I have to try every opportunity and it wasn't even useless to be here, because you showed me a site, where I can look further.

[akula]

Akula thank you for the tip. We are a small group of industry professionals, who founded a company to be able to develop our own game. We aren't a big company or so.

I have to try every opportunity and it wasn't even useless to be here, because you showed me a site, where I can look further.

Yeah man, it's all about priorities...look
I'll tell you how this works in a nut shell..

1. The private equity market is pretty mature. There's no need to get creative. If you wanna close finance, you follow the one standard route, and you do it well.

2. The process starts with you using databases and the media to identify sucessful vc exits on MMORPG investments..ie. Club Penguin Inc (acquired by disney) or Giant Interactive Inc (IPO) etc....then you start contacting the founders who started these companies and who are now millionaires with domain experience

3. You ask them to join your advisory board/board of directors/shareholder register/executive team etc (and why wouldn't they join? after all, they like MMORPGs)

4. Regardless of whether they join or not, you ask them for referals to financiers who financed their companies

5. You approach these financiers and tell them; "look John from Penguin is on our advisory board (or "john referred us"); you already made $100m with his MMORPG company, now you can finance our MMORPG and replicate your success".

Five steps. No need to get creative.


That is all

Bonus: Here's a litmus test for your capital raising savvy. Do you know the names of every cofounder for Club Penguin Inc? Have you emailed or called these guys asking for advice? Have you asked them to referal to angels or venture managers who financed Penguin?
If not, you should.

[Hunnenkoenig]

Yeah man, it's all about priorities...look
3. You ask them to join your advisory board/board of directors/shareholder register/executive team etc (and why wouldn't they join? after all, they like MMORPGs)

Uhm... probably my english is not well enough, but I don't understand, what you mean hear.

I have no shareholder register and such. Why would somebody from a succesfull company, which is making competitive games, join me anywhere anyway? And why would they tell me, where to look for money? And why would they even recommend me fo their investors?

I contacted about 60-80 venture capital companies, business angels, publishers already and a few of them answered, a few of them were interested, but the most has not even answered.

So why would somebody help me from another company to get to their investors? I don't get it.

[akula]

I have no shareholder register and such. Why would somebody from a succesfull company, which is making competitive games, join me anywhere anyway? And why would they tell me, where to look for money? And why would they even recommend me fo their investors?

So why would somebody help me from another company to get to their investors? I don't get it.

Ok..so much for the nutshell ..valid questions nonetheless..let me enumerate the problem:

1. Recruiting sucessful entrepreneurs to the board.
Your goal is to recruit a sucessful company executive who works in the same industry as you, and who has made money for investors. What can you offer him? What incentives is there for him to help you?

It's almost always one of three things;

Risk diversification: this means that you're offering this guy an opportunity which expands his portfolio exposure to market risk. Basically, if I'm an entrepreneur heavily invested in one MMORPG, it's not good for me to have all my eggs in one basket. So if my MMORPG caters for the fantasy genre in US; it will be a rationally sound decision for me to join the board of an MMORPG doing the kids genre in Germany.

Technology Transfer: as an entrepreneur heavily invested in a sucessful MMORPG, it makes sense for me to get involved with companies who are commercializing new kinds of technology such as mobile RPGs. This kind of involvement protects me from falling behind or being disrupted by competitors in tech dev.

Personal Reasons: I can tell you with certainty that most sucessful entrepreneurs have a pronounced need to share their experiences and know-how with the next upcoming generation of entrepreneurs. This need is just something that's part of the entrepreneurial gene. It's the community etiquette. It's serves as the basis for communities such as Silicone Valley, where the 5 steps I've described occur because sucessful entrepreneurs help out the new generation of entrepreneurs (particularly if both of the parties went to the same school, worked for the same company, or are members of the same association).

2. Asking for referals to financiers.

Ok...so what are the incentives for an entrepreneur to pass dealflow to a financier? First of all, asking for referals is not a formal process. You're not asking "the company" for a referral - you're asking the entrepreneur (who ought to at this stage have some sort of an advisory/mentorship relationship with you). Above all, the referral process is the principle method for peer filtering deal flow in venture circles...if people didn't pass on the deals, the system would break down (read the article to understand why)..so when you're doing startups in a startup community that's just what people do - they refer deals to build their own reputation and keep in touch with one another.

Now..when asking the entrepreneur for a referral, you will not be directed to "ABC Venture Capital Inc", you'll either be directed to Mr. Joe Polaris who worked at "ABC Venture Capital Inc" when your mentor closed his deal with him (and often, Mr. Joe Polaris will be at a diffrent fund by now); or you'll be referred to one one of Mr. Joe Polaris' coinvestors...because institutional venture managers deploy their capital in syndicates.

So, basically, the incentive for the entrepreneur in making a referral is that if your company does well he'll get all the credit, but if does badly you'll get all the blame...but again...these things don't happen formally. Normally, you and your mentor will be at some conference/tech mixer/trade show..you'll run into Mr. Joe Polaris and your mentor will make an introduction. It's not rocket science.

....look...I'm not gonna inundate you with articles (unless you want me to), but if you wanna learn how financing deals get closed, read the article I've linked to (it's written by a vc), or read the 200 odd vc blogs in my signature...or read about referals in my startup search engine (all the results are from venture capitalists)

I dunno, is this stuff making sense to you? Just follow the 5 steps.

[Hunnenkoenig]

Thank you for your post. I have read that article and will read the others too.

[Cole Taylor]

OP:

As stated, it is absolutely critical that you build yourself a strong advisory board with established industry players. Dont even bother with a board as your investors are going to control that anyway with the amount of money you're seeking.

I dont know what the scene is where you're located, but know that most Investors prefer something in thier backyard. Sometimes location makes a huge difference. Here's a company locally that's in your space, Red 5 Studios, that recieved VC funding prior to having any specific game lined up:

Money: Game startup gets $18.5 million in funding - OCRegister.com

Moral of the story is that in the VC arena it's about who you know and what you've done. You can be the smartest guy in the world, but if you're not a recognizable name in the industry it's going to be an uphill battle. Align yourself with those who have successfully raised the type of money you're going after.

Also, in addition to the prepared documents you have, investors are going to want to see very detailed budgets and a concrete operating plan. The operating plan is often overlooked but it's a crucial piece of information especially considering that you're pre-revenue, development stage.

Personally, on my current venture I did just that. I contacted former CEOs of publicly traded _________ companies who raised significant amounts of capital prior to product release. Im staying away from VC as I want to dicatate the terms and intend on maintaining the majority share. So now I have a world class advisory board of known players with more connections than I could possibly ever use.

A shell has been lined up, a LOI signed, and the BD is prepared to raise $x. All I basically had was a viable idea and a sustainable business model in a growing, underserved market.

Start looking for the heavy hitters NOW!

[Hunnenkoenig]

The problem is, I can't seek advisors, because I can't just write to a guy, who is a succesful game developer, if he wants to be my best friend and do so, if he were involved in our company.

I can't pay such guys and just for my beatuful blue eyes they won't do anything. But thanks for the tips and links.

[BusinessAdviser]

The problem is, I can't seek advisors, because I can't just write to a guy, who is a succesful game developer, if he wants to be my best friend and do so, if he were involved in our company.

I can't pay such guys and just for my beatuful blue eyes they won't do anything. But thanks for the tips and links.

If you can't do that, I think you'll find the business world very difficult. I wish you the best of luck though.

[Hunnenkoenig]

Do you want to be my best friend and advise me for free?

[BusinessAdviser]

I have no clue where this best friend stuff comes from.

[Hunnenkoenig]

Who else would help me for free?

As I said, I can't afford such people for money, because I have no money. That's why I look for investors.

It's easy to say, "look for advisory board", but no stranger will work for me for nothing. They don't even know me. Why should they help?