Co—founder of The Games Fund on working with investors: "35% is the maximum share that should be given at the start"

Another speaker at today’s WN Conference in Moscow is Ilya Eremeev, co-founder of The Games Fund venture fund. During his speech, he talked about what types of investors there are and what should be remembered when interacting with them.

Ilya YeremeyevAccording to Yeremeyev, today the “golden era” has come in the gaming industry.

• In recent years, the entry threshold for developers has decreased. In addition, studios have the opportunity to choose the right partner from a variety of investors and publishers.
• The studio should be managed by at least three people: the CEO, the technical director and the marketing director. The founder of the company often wants to gain full control over the studio, but this has its own risks. For example, he simply will not receive the necessary support in difficult situations. If the founder wants to retain a key role, he must have a clear vision of the company’s work.
• Eremeev identifies three types of partners that developers can work with:
  1. publishers are companies that focus on one product and pay little attention to the development of the studio;
  2. strategic investors are the people with the most resources. They help studios with legal and technical issues. But it’s not easy. Their main goal is to gain control of the company. Studio founders usually don’t like this;
  3. venture funds are companies whose motivation often coincides with the goals of the founders of the studio. There are also risks when working with funds, but they do not cancel out the potential gain for both sides.
• Before entering into an agreement with a future partner, the studio manager should ask three questions: why did he decide to invest in the studio? Where did he get the money from? Who will the studio work with?
• Whichever partner the company chooses, it is necessary to conclude a written contract with him, Yeremeev is sure. Developers also need to involve their own lawyers for this.
• Eremeev does not advise giving investors a share that exceeds 35% at the start. He is sure that it is necessary to attract as much money as is enough to reach a new level. You should not be afraid of failures, but having a spare board is also useful. “Some founders have a 20-30% stake in the company and are proud to receive funds from investors every month. This is a complete trash. Everything should be in white. A clear justification is needed for why and on what terms investors give money,” Yeremeyev summed up.

The Games Fund started working in April 2021. Among its founders are GEM Capital and people from MGVC, Riot Games and Game Insight. The company positions itself as an early-stage venture fund and is primarily interested in developers from Eastern Europe.