Forty-one percent of global startups have less than three months of cash available, according to a recent report from Startup Genome. That means it’s time for everybody to be sending out pitches. And that’s why Ilya Eremeev, a veteran producer and investor, has created what he calls the Perfect Funding Pitch Deck for game entrepreneurs.
Eremeev has heard a lot of pitches during his 12 years in the game industry. He is a senior executive producer at MRGV, the strategic investment fund of Russia’s My.Games. In the past two years alone, Eremeev has seen or heard thousands of game company pitch decks, pitch emails, pitch audio messages, pitch notes, and even pitches on the beach. His company has invested in about 30 game companies in two years.
“I see hundreds of mistakes every year with messed-up pitch decks,” he said in an interview with GamesBeat. “I realized there was no framework. I thought it would be easier for game startups to reach potential investors and provide them with information that’s really relevant for the assessment.”
The template of just 10 slides includes all the information potential Investors need to see, the exact order It needs to be, and, most importantly, does not include anything that should not be in a pitch deck, Eremeev said. The company in the deck is fictional. The first slide is merely a branding opportunity, or a chance to imprint your company’s name and logo in the investor’s mind.
How to value your company
The next slide should explain who the founders are and their roles in the company. Another slide explains the team composition, which should show how many people you have, how quickly you burn money, and how balance and experienced your team is as well as your plan for growth. And subsequent slides explain previous games you’ve worked on, a new proposed game that requires funding, competitor analysis, roadmap, and key performance indicators. If you don’t have successful titles, you can show failed ones and what you learned.
The deck should also include exactly what you’re asking for in terms of investment. The failure to include this is one of the most common mistakes. He suggests investors should own about 20% of a company, while the founders should hold the rest. He suggested the founders should not give away more than 30% in exchange for funding. And if you can’t figure out your company’s valuation yet, there are financial instruments such as convertible debt that helps you defer that decision on valuation until later. (In the case of convertible debt, the money you receive is a loan at first and then can be converted into a percentage ownership of the company later on).
“At the early stage, the value of the company is completely subjective,” Eremeev said. “If you give away too much ownership, it will be complicated to do later rounds. But the price you get from your investor will be the right price.”
Common amounts to raise range from $1 million to $5 million, but every game company can be different in this respect. The deck should close with a forecast of your profit and loss chart, and a thank you message at the end.
Sounds pretty simple, right? It should be short, because most investors don’t have a lot of time to wade through a giant deck. If you are invited to come back a second time, you’ll be able to load more slides into the presentation. But the ideas about your mission, focus, values, and strategy should be clear and simple to understand.
Eremeev also has his pet peeves of things he doesn’t like. “Please avoid sentences like ‘We have 600 years of experience combined,’” he said. “Experience does not combine.” It also isn’t necessary to show analytics or market growth charts, at least not yet.
When you describe the game in a slide, this should include the core concept, the target audience, marketing positioning, the player story (like what the player does), monetization, and screenshots. The competitor analysis slide shows how to explain the idea better and whether the space is a “red ocean,” with too many sharks chasing after too few fish; or a “blue ocean,” where there are few competitors.
Eremeev doesn’t want people to bluff or lie in their key performance indicators. Just show what data you can, he said. The investment ask should show where the company is based and when it was founded, and the CapTable (structure of the ownership). It should say what you are asking for and on what terms, how you’ll spend the money, and the preferred timing of the deal. You should close with your contact information.
Eremeev said it didn’t take long for him to put together the perfect funding pitch deck, as he had thought about it for a long time and really wanted to save time.
After the pitch is approved and Eremeev wants to follow up with the entrepreneur, he said the company usually wants to see additional financial information like profit-and-loss statements, cash flow, and intellectual property ownership information papers.
“If you can’t put an idea in one sentence, maybe you haven’t figured it out,” he said.