M&A and investment in the game sector Financing game businesses Angels are looking to invest early in through an M&A exit or IPO) and businesses which have the potential return the profits to investors. In this to attract further investment from context, VC is generally not patient VCs and grow in future. In the UK, capital and will seek investments such investors will often benefit from which have fast growth and high certain tax incentives – such as Seed exit value potential. Enterprise Investment Scheme (SEIS) This will drive the types of game and Enterprise Investment Scheme studio and projects which are (EIS) relief – which have significantly suitable for VC investment. For expanded the angel investor base example, a mobile game start-up by in recent years. a founder team with prior experience Venture capital funds (VC) funds at a major mobile publisher and a strong understanding of mobile unit VC funds pool money on behalf of economics and platform trends is financial investors (such as pension a classic VC investment opportunity. funds) to invest in high-growth By comparison, a small PC/console businesses and make significant studio making an indie title with returns. They’re high-risk investors. a more niche target audience The classic model of VC investing may be better suited to working will see the bulk of their investments with a publisher. making little or no return, but a small number will make such large returns Strategic corporates they carry the whole fund. Strategics corporates (or strategics) A typical VC fund will operate on sit somewhere between VCs and a ten-year cycle – meaning that publishers. They will typically have within this window the fund must their own business in the gaming be raised, deploy its capital into a industry (eg a publisher) but will business, see that business achieve also make minority investments in significant growth, and ultimately businesses which they see as having have its investment released (usually strategic value to their core business. 13