In many instances, this is an initial plan or issuing new equity). The step towards an eventual acquisition investor will usually take a director if the business is successful. In others, seat on the board and there will also the investor may be happy to remain be detailed terms around information a minority shareholder and seek to reporting and dealings in the expand the commercial relationship. company’s share capital (including Strategic capital will invariably be investor rights on anti-dilution, pre- more patient than VC and is not emption, right of first refusal (ROFR), necessarily looking for a quick exit and drag-along). after rapid growth. As investors are investing in the The terms of equity investment will founder team as much as the IP often be complex and will require and technology of the business, professional legal advice. In high- founder share capital will also often level terms, the investor will typically be subject to detailed vesting provide capital in exchange for arrangements which could see the shares in the business, usually in founders lose some or all of their the form of preferred shares which equity if they leave the business early. rank ahead of the founder equity if Raising equity finance is a complex the business experiences difficulty. process and won’t be right for every These shares also carry special game business. It does however rights. In early-stage investments, have the potential to unlock the percentage share in the business significant capital and rapid growth. demanded by investors will usually Many developers have leveraged range from 10%-20%. equity finance to unlock rapid growth Day-to-day management of the which has allowed them to scale into business and creative autonomy will successful gaming and technology generally sit with the founder team, companies (including the likes of although investors will demand Epic Games, Peak Games and negative controls over material issues Dream Games). (eg agreeing the overall business 14