The Pitch: Taking the Work Out of Play
Company: Venati Games
Production Manager: David Nolte
We are Venati Games, half a dozen veterans from the game, film and comic book industry with experience at companies like Hasbro, Lucasfilm and Marvel comics. Our motto is: “We take the work out of play.” For the past year, we’ve been working on “Ares,” a game about colonizing Mars. “Ares” combines two popular genres: quick, casual games, like “Tetris”; and virtual worlds, like “World of Warcraft,” which require more time and money. The combined market for these genres is more than $5 billion a year. With “Ares,” we want to take the work out of playing virtual worlds by providing a compelling experience in shorter sessions. This will attract casual players who are curious about virtual worlds but turned off by their high time requirements. Yet, production quality will remain high. “Ares” will produce revenue through subscriptions, game transactions, advertising and the sale of virtual goods. The major challenge is to produce a high-quality product within a reasonable budget. One solution is “Blue Mars,” a virtual world created by Henk Rogers, the man behind “Tetris.” Rogers plans to rent out virtual real estate on “Blue Mars,” offering us sophisticated graphics and all the necessary services. By piggy-backing on “Blue Mars,” we can significantly cut our development time.
To build a prototype, we are currently raising an Angel round of $50,000 in convertible debt at 2 percent interest, with additional warrants. This instrument will convert on a company valuation of $500,000 — terms as good as or better than our Series A, which is expected to close in mid-2009 for a total of $2 million. We haven’t applied yet for qualified high-tech business status (QHTB) under Act 221; however, we are confident we will qualify, since “Blue Mars” already does. (This business plan was also presented at the Hawaii Entrepreneur Investor Pitch Competi-tion sponsored by Enterprise Honolulu, HiBEAM and High Technology Development Corp.)
Yuka Nagashima, executive director and CEO of High Technology Development Corp. Combining the two game concepts is an intriguing idea, if you can create an environment that attracts users whose profiles have been mutually exclusive to date. The revenue model is tried and true. How you are going to support six people with $50,000 remains a mystery. I wanted to know more about channels to market, how to address game scalability, and how your team will be able to deliver (on both game design/coding as well as the business front). Beware: It’s a crowded market. Bill Spencer, president of Hawaii Venture Capital, executive board member of Hawaii Angels The pitch falls down by not proposing how they will use the investment and how an investor will benefit. This is a warning to the investor that they don’t know how much money they really need. Entrepreneurs need to be very clear about what they can achieve with an investment, and what the investor gets in return. If they think they will qualify for QHTB status, then they should proceed to get a comfort-letter ruling, which is more reliable than saying they “think” they can qualify. Peter Kay, president of CyberCom and technology entrepreneur The virtual world games market is incredibly competitive and many better-funded huge hits didn’t make it (witness “Sims,” one of the most popular games of all time, which went down in a ball of flames as “Sims Online”). The “Blue Mars” leverage is wise but won’t guarantee success. Tell me what will make you win where others have lost and what the warrant “pop” is or I’ll just wait to join the much less risky A round later.