To figuring it all out at the end and starting a life with her partner. The chracters life is told in such a way from trying to find herself and what she wants to do with her life. From seeing the different rooms to unpack you tell the character is getting older to levels where she finally meets a partner and creates a life together really is a beautifull thing to see and play The story is really nothing special but what makes me impress is that every object you unpack tells the story. The objects that you unpack really brought nostalgia back to me like unboxing a PS2 or Gamecube really shows the little deatils that can put a smile on someones face. The vibrant colours through out each level really brought the game to life. The same level of acquisition can be done with considerably less capital just by introducing some flexible debt into the capital mix.įounders and VCs may argue that the high valuation sets the bar high for exit valuation, with gaming acquirers continuing to pay top dollar for mobile gaming startups based on some ambitious lofty projections.īut as soon as the froth comes off the market, attention will quickly turn to how much liquidity preference exists in a downside scenario - in other words, VCs will almost always have a preferred return which will see them recoup at least 1x their investment first.Īcquirers will also know what they need to pay to get a transaction done, which can bring the amount of VC funding raised and associated liquidity preference to the forefront of the valuation discussion and can end up working against the founders.Unpacking is a Indie game that makes chores fun a game that makes one of the boring jobs fun. The company then requires less upfront capital to achieve its lofty scale-up plan. So why do founders and VCs not fund their UA spend in a more capital-efficient way? In other words, introduce leverage to fund somewhat predictable LTV cycles, using a combination of AR financing and loans against future receivables instead of dilutive equity? If the studio happens to make the wrong bet on their long-term retention and monetization projections and the expected LTV is not recovered, then the spend on advertising is unprofitable and the company takes a direct hit to its P&L - all funded courtesy of their VC. These are big money bets on user acquisition returning the expected LTV over long time horizons. This is a highly inefficient way to deploy venture capital when alternative financing instruments are available and should raise alarm bells not just for the VCs but also their invested LPs. The reality is - and this is particularly true of later stage rounds - is that most VC funding raised will be deployed into funding long-term UA cycles. If the free flow of capital into venture capital funds dries up, how will this play forward for startups and their exit opportunities? However as the world wakes up to paying for costs endured through the pandemic and the economic impact of the war against Ukraine, interest rates are rising and inflation is at record highs in the US and UK. Let’s remember that economies are cyclical, though thanks to a lot of fiscal stimuli and the pandemic we seem to have missed out on an economic downturn since the 2008 financial crisis. As a benchmark indicator, the average exit valuation in 2021 was $196M. This sticker price is more than Embracer paid to acquire Gearbox ($1.378Bn), EA paid for Glu ($2.1Bn) or Netmarble paid for SpinX ($2.19Bn). If the company achieves its goals (and does not need to raise any further round of funding - very unlikely in today's environment), the company would need to achieve an exit valuation of $2.5Bn for the VC to receive a 10x return on their investment. Let’s assume the founders give away 20% of the company, valuing the seed stage company at a whopping $250M post-money. Pause for a second and consider then that the studio would need to spend $30M in ad spend before the first cohort starts to break even, hence justifying the size of the round, right? ![]() ![]() ![]() In order to propel a game into the top charts, they expect it will take $100k daily ad spend. Let’s say the funding is for a promising merge game with an expected 10 month (d300) breakeven period on its ad spend, and a 2 year LTV recovery timeframe. Seed stage studio raises a mega $50M seed round based on a strong team and strong early metrics.
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