When a person is trying to put together a game by building a team and a company for wich that team works for, how does one aquire the funding to do so? Stocks could be an option for beginners, but I know that can lead to a whole mess of future problems. I'll need a Research and Development department, a Finance department, a Manufacturing Department, Mailing Department and a Sales Plan for Distributors/ Web-based Vendors that pays on volume. And that all equals a whole lot of $$$ in start-up money. If only I could get suppliers to sponser me for using their hardware... How would I go about it?

Are you serious? This is one of the weirdest questions asked here so far..
I want to start a large business. How can I get money to do so? :)

Either

a) start small by forming an indy game development company and build up some reputation, experience and in the ideal case also financial resources.

b) start large with a whole lot of starting capital and a solid business plan to convince investors as soon as you've got something to show

-Markus-

Can't we have a forum sticky for these type of useless questions?

Q: How can I fund my game startup?

Typical answer: Well, you can either start small with no money or big with a lot of money.

No kidding.

I want to start my own publishing company. How can I get funding?
Answer: same.

We should really focus more on game business factors and not these general 'how can I get startup money for my big business' questions.

Then eventually it needs Obscure to tell you that nobody is going to fund a startup, a startup publisher, etc. unless you have a proven trackrecord.

Anyone over the age of 3 can figure out that you can either start small with no money or big if you have millions sitting in the bank.

Why do people think they can get funding just by starting a business? Anyone can start a business. And it has nothing to do with game development.

Mark

[Edited by - Mark Tanner on April 7, 2005 8:15:38 AM]

Given the title of this thread I'd like to ask something a bit more serious in relation to fund raising.

In most cases an indie isn't even going to get close to a publisher in order to get funding for a project, so I was curious as to what other respectable sources were available. Say a bank?

Would a bank manager really consider giving an indy business owner a loan even if the business had no real financial future as a startup? If so what would it take to convince them? I just can't see a bank manager wanting to sit down and read a design document or watch a product demo for a computer game, so is the bank a legitimate source of finance given that the decision would surely rest on the 'saleability' of the product?

You can get the funding easily from the bank under following conditions:
- You have a stable daily job and therefore a good credit history
- Your country`s economy allows bank loans for no specific purposes (i.e. not just loans tied to some specific thing like construction material, house building or whatever)- you can take a loan from bank for whatever you want and won`t have to tell the bank what have you used it for
- You have some engine already built along with the game demo
This is where you go to bank, borrow a money that shall cover your living expenses for X months.
Wait for the money to really appear on your bank account.
Now quit your daily job.

Repeat with as many people as there are members of your dev team.
This is what we did and it worked out well for my company. True, you won`t make an AAA game like that, but budget PC games are possible. Work your way up from there by making budget games or some contract work. Try to make several smaller shareware games in parallel with contract work and main game production to give you some cash-flow in the future.

It`s easy, right ? It`s just sort-of very risky, definitely not for everybody.
Because if after X months you realize that you still need Y months to finish (quite common) or no distributor wants your game, you`re screwed, without a daily job, without any money on your account and your kids keep asking you:"Dad, where`s my chocolates and why don`t I have same clothes as my friends?".
Just decide what you want to do in your life.

Quote: Original post by smiley4
...how does one aquire the funding to do so?

Stocks could be an option for beginners, but I know that can lead to a whole mess of future problems.

No one will buy stocks in a company that doesn't exist. You could give shares to staff instead of pay - but only if they already have enough money in the bank to live while the game gets made.

Quote: I'll need a Research and Development department, a Finance department, a Manufacturing Department, Mailing Department and a Sales Plan for Distributors/ Web-based Vendors that pays on volume.

You certainly don't need a dedicated manufacturing dept or finance dept. You need a small team to make the game and you need a web site (link to a payment processing company) to sell the game.

Quote: If only I could get suppliers to sponser me for using their hardware...
How would I go about it?

If only the streets really were paved with gold and every time it rained, it rained pennies from heaven. Setting up a business, any business, costs money. If you start a shop you need to pay rent, buy stock and pay legal fees to sort out your lease. Game development business is no different. You need funds to start a company and other companies aren't just going to give you money - especially if you have no previous experience.

The single biggest cause of failure in new companies is insufficient starting capital. Of course you could just as easily say that the real cause is management failure as the founders were dumb enough to start a company without having the money to survive through to break even.

The possible ways of getting money are:
1. Raise loans from the bank (against your home) as Vlad has done. This is risky because you are usually liable for the debt and may lose your home. Of course if you really believe you know what you are doing this wont worry you.
2. Borrow money from friends and familiy.
3. Get a full-time job - work on games part time, build up slowly (several years)
4. Search out local business start-up grants or media-grants from local/national bodies. I work with a team who have secured £250,000 in matched funding to start their game company. Unfortunately it is matched funding so they have to invest the same amount of money in order to get it. Also they only got it because they had several years proven game industry experience and a good business plan.

To get "real" investors you need to have the following:
1. A proven track record running a successful company,
2. Proven experience in the target industry,
3. A team that your investors believe can deliver (in otherwords an experienced team),
4. Anywhere from six months to two years (that is how long raising investment can take).

Quote: Original post by Cygon
Either

start small by forming an indy game development company and build up some reputation, experience and in the ideal case also financial resources.

I think that's how all the major companies got started, so it would probably be the best choice. Make lots of games to build a portfolio (make sure they're good), and once your company is secure, then make it big.