Serious Games Summit DC 2006
The Serious Games Fund Raising Fandango - Chris Oltyan

Basic Financing

Here Jerry laid out some basic information and bullet points of advice

Basic funding levels:

• Early Stage: 0-200k
• Angel: 50k-2 mil
• Venture: 1mil +
• Alternative: SBIR, Sole Source Contracts, Loans, Debt – up to 5 million

Key to getting funding:

• Have good management x3
• People are placing bets and you need to have a safety factor
• Understand that investors are looking to have 10-20 return (5x for some) in 4-7 year liquidity event
• Strategic buyer more than IPO these days.
• Getting help is important. Finding money is a full time job and getting someone scouting all the time is important. Expect at least a 5-7% finder’s fee.

Recommended Reading:

• Art of the start – Guy Kawasaki
• The World is Flat - Thomas L Friedman
• Handbook of Financing Growth – Ken Marks

Advice taken from Art of the Start:

• Plan backwards from where you want to get
• Services don’t sell, products do
• Determine the product early
• Focus on executive summary and slides
• It will take 2-3x longer than you think
• Think global, the world is flat
• Unexpected setbacks will occur, it's good to have friends to help during the hard times
• Make hires wisely, take your time
• It's HARD

He also suggested that any starting entrepreneur find local resources, as they want to develop you and the region. Angels and entrepreneurs in the area usually have groups and regular meetings that are a key to become a part of.

Jerry concluded with the valuation of Virual Heroes, done by a Discounted Cashflow valuation, of 10.4 million dollars. His closing remarks on how to take a company from very little to quite a lot were “Stay ahead of the curve, and keep to the Thin edge of the wedge”

Q&A

Q: How do you handle STTR contracts?

A: If you look for them, keep many irons in the fire. You need to be investigating 2-3 items at all times. Also, make sure you have enough bandwidth to take advantage of opportunities.

Q: How to differentiate Medical training in software from hardware?

A: You don’t. Manikins cost 250-300k, and needs a custom room, staff to operate, with no AAR. Medical training requires a scalable solution. Software provides this, as well as better AAR, team, and collaborative training.

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