Here’s What’s Funny About Fundraising, Mobile Gaming and eSports
I was sitting at another pitch event, this one regarding eSports. My firm had just announced our first successful round, raising $1 million with the battle scars to prove it. The speakers on stage, made up of some of the hottest Angel and VC groups in Southern California, which also happens to be a regional incubator for gaming and eSports, were going on about the future of eSports and how mobile games would lead the way to explosive growth for this nascent industry. I smirked. My partner leaned over to me and whispered, “Didn’t you pitch all of those people up there?” And that’s when it hit me.
We spent the past three years building a mobile eSports gaming platform and pitched and pitched and pitched for someone, anyone, to help us raise funds to build out and grow our business, accelerate our developmental maps, hit projections, milestones, Hell, just give us a chance to prove and show that our industry veteran team really knows what the f#&$ we’re doing. I mean honestly, we have four leaders with 25+ years experience each, seven people with deep and relevant direct industry experience, our youngest team members have 10 years in mobile ad tech and gaming! We put the years, theories, propositions, hypotheses, experiments, tests, data, validation and the scientific method hard to work. We wrote white papers, case studies, found market anomalies worth exploiting, pivoted and built a bad-ass, lean, mean machine to produce, monetize and capture valuable data from millions upon millions of users around the world. Think about the value of that on the open market. I am certain that Microsoft, Sony, Nintendo, Virgin, Disney, Fox and Sky networks would all be interested to know exactly how gamers on Google Android and Apple iOS behave in a mobile entertainment environment in places like South East Asia, Latin America, Africa, India, not to mention China, North America, Europe and the Middle East. ‘Value? We don’t need no stinking value,’ And so it goes…
We told people investing in the gaming industry, app industry, eSports industry, fantasy, casino, etc. We hit virtually every VC in Silicon Valley, heck, the entire Bay Area, LA and the rest of Southern California. And do you know what we heard? Crickets…
So, we boot strapped our build, kept our day jobs, worked ridiculous hours at night, weekends, holidays, school breaks, you name it, we worked during that event too. We took pay cuts, founders weren’t paid at all, borrowed money, time, credit, friendships, family, ah but wait; you’ve heard this before, right?
Fast forward to where we tuned up the team, tightened up the systems, processes, streamlined the road map, tested user acquisition cost, conversion, retention, monetization, gamification, we might as well have been building a rocket ship for Virgin Galactic or Space X. And you know what? Nobody cared. I mean family and friends sympathized or empathized, sure. And we managed to squeak out a few dollars from our closest relatives, but in the VC community, nobody bought it. So, we employed a group of hackers who in turn deployed a drip campaign and it worked. We had multiple meetings, pitches and product demos. But now the new blow off was, “you’re too early,” or, “how much traction do you have,” I mean these were supposed to be “Early” and “Seed” round investors. Huh?
Mind you, our team has years of success and failure stories, building other businesses. I personally built four companies before this endeavor, assisted in nearly a hundred others and was the primary media strategist behind a very famous daily fantasy sports brand (ahem). I couldn’t even get them to listen. We began to second guess ourselves. Why was this particular market so hard to get a start? And the punch line is….
Apparently, they weren’t interested until we didn’t need them. So, we got a bank loan…After investing $500k of our own, and a little bit out of desperation, we approached a bank and found that banks are happy to talk to us. We have decent credit so why not? It takes about a week — Yes, one week to get a small bank loan. Then the other banks are interested. Really? Yeah, it’s true. There are dozens of online banks and brokers who make loans to people and small businesses, including start-ups, all day, every day. Crazy right? So, we take a loan and you know what happened? Suddenly my email box fills up. Investors, VC firms, more banks, they are all interested now. I mean whiskey, tango, foxtrot, right?
So, here I am at this pitch event, listening to the industry investment experts talk about how mobile eSports is the next big thing, but I’m wondering where’s the passion? Where’s the real exploration. It’s called VENTURE capital, but where is the venture, curiosity and risk? Where were these experts three years ago when I knew without a shadow of a doubt that this wave was coming. I guess it’s all about playing the game, pun intended.
