Grants?

#1 I don't see any problem in using a grant to pay for the development of your product. If you have something specific in mind, let me know.

Jeff Tunnell GG

#2 Say we received 100k in grants for example and we were to use this money for full-time staff wages during development. Would we...

A. Receive royalties at a lower percentage until GG makes 100k from sales?

-or-

B. Have to wait until GG makes 100k from sales before we start receiving any royalties at all?

-or-

C. Work out royalties another way? If this is so, could you please explain how this is done?


Thanks
Mark

#3 Mark,

I honestly have no ideas what you are talking about. If you get a government grant to develop your product, it has nothing to do with royalties.

Jeff Tunnell GG

#4 Mark, GG.com gets paid out of sales, not out of development costs. Theyre two entirely different beasts.

If you sell 100 units, gg.com gets money from those 100 units, thats all.


Youre talking about getting paid to MAKE your game not SELL it. Once its made, THEN you start paying out depending on your sales.

Phil.

#5 Jeff: LOL, I confuse myself sometimes, thanks anyway.

Phil: Right on, thanks for clearing this up.

#6 The idea of getting a government grant to make a game is just goddamned brilliant.

I mean, painters can get government grants to paint. Why the hell can't an indie game dev get a grant to produce a game? Lol, that is really brilliant.

I'm not sure about getting a grant to create a commercial product vs. a freeware product, though . . . I'm only familiar with artists and general-education grants myself.

#7 Is there any information online somewhere that explains the process one would have to go through in order to get a grant?

#8 Most of the online stuff for the grant application process is fly-by-night companies and get rich quick BS. I've gone down this road (grants) already for game development. The first thing you need to know about all the advertisements, etc. that tell you that there's upteen billion dollars just waiting for you to ask is mostly BS (but not completely :-)

Grants are normally for very specific applications. For instance, technology development grants - if you were writting you own 3D engine and planning on marketing it (I'm using Kansas as an example here) as a development tool, there is a 40/60 matching grant up to $30k, or a 40/60 matching grant up to $100k available. However - the grant is more of a 'loan' in many ways. You have to pay parts of it back from the profit from sales of the engine.

(An aside here: KTEC's grant is absolutely brilliant - really! If your R&D project cannot be commercialized in a reasonable fashion, you aren't expected to pay it back. If you refuse to commercialize it after successful development, they take control of the product. If you are successful, and do market it, you pay 1% of your sales back into the GRANT so that others can make use of the grant later!!)

And the grant application process is pretty henious for many things. It's all in what you are after, and how you are gonna handle things, etc.

The quick way to find out about grants - look up the technology development section of your local or state goverment, and talk to them! They will point you to the resource you need. However - it should be noted that many of the grants are administrated by technology development companies - for profit companies that handle the grant making process for the goverment. While at first that may seem a bit shady, it isn't - thier job is to dive into your company, see what you chances for success are, etc. and then determine what (if any) grants are available to you, handle the grant making process, and then continue the paperwork process. And for example here in Wichita, KS the Wichita Technology Corporation was who I worked with - if I would have used thier services, it only cost me a small percentage of profits (which is how they grow, and are able to handle more clients, and continue tech development in the region. That's why I say the for-profit status isn't shady in this case, though some people will probably debate this point. They would be wrong though ;-)

If you have any specific questions, feel free to email me or ask me on here - I'm more than happy to share what I know on the subject.

#9 This subject has been discussed on the Garage Games IRC for the past several days. What initially started this sort of discussion is that a lot of people (indies) are saying..."If only I had $50,000 I could....". I got to noticing the mathew Lesco stuff in my email and started wondering.... could someone starting as an individual, put togther a company or independant developers that operate on line (the internet) get grants to support initial development...
What would it take? Like a step by step plan.

Ive heard that creating a completely new small business is easier than doing something really big. I heard there were all sorts of grants out there too... money for referbishing a building for your business, money for hireing minorities, technology transfer money. all sorts of nitche funds that can, with a little effort, be had. In fact It might be good to hire someone to administrate these funds and support their acquisition. But no matter what... we need an initial plan to get from "talking about it" to actually doing it...

#10 As someone chasing grants here in the UK, the Government is quite keen on stimulating small businesses, especially if you are under 30, there is a lot of money out there in "soft" grants, which require the company to pay them back if they turn a profit, if they are wound up the grants and written off, but 1 more point for people also in the UK, 90% of grants will only pay upto the amount that you already have, i.e if you have 10k they will pay upto 10k, all also have a maximum, so if you have 400k they may still only give you 25k. Plus quite a few have some pretty nasty forms to fill in, but keep trying there is money out there, I know I'm chasing some of it :)

#11 I won't say that grants are a waste of time here in the US, but, they are damned hard to work with for something like a game development company. I've already been down this road - in fact, I was going after technology development grants to basically do exactly what GG is doing now - they beat me to the punch :-) (However, in all fairness they have a much better plan than what I had in mind.) First step, of course, is the usual Business Plan and Marketing Plans. Then you have two routes you can go down:

1) Go find yourself a technology development / management group. They have grant writers (a good thing. If you are doing it yourself - good luck. Grant writing is almost becoming an artform - I've got a friend who does that as part of her job, and it's gotten ugly anymore.), people that can help with strategic planning, etc. Remember - most grants for something like this now come with the expectation of a return on thier investment. If you fail, you don't pay it back. If you succeed, they expect to get the money back. So they get pretty selective anymore. Have the group handle grant issues, and you focus on game development.

2) Do it yourself. The big pro here is that you don't loose a portion of your company (yes, most management groups want a piece of the action, plus a small split of profits. Very small piece, unless you start talking VC's.), the profits are all yours, etc. The downside is you need to document having a track record, experienced management team, etc. They don't just hand money out for people to live on very often - dispite what the screaming man in a loud suit on TV says. You do get an automatic leg up on the situation if you are a minority or female - there's grants taylored just for 'em. (In fact, to the point where they now discriminate against white males. *GRUMBLE* It's always one extreme or the other.)

My personal opinion is this: With the time, energy, and effort you are spending chasing grants, you could have released your first small game, and started the process of self-funding. And that's money you don't have to pay back. :-)

#12 Oh, and one more thing - when someone says "If I only had $50k I could...", alarm bells go off in my head. Why? Part of the process of building up a Business Plan and a Marketing Plan is to determine exactly how much money you need. $50k is chicken scratch when it comes to starting a company with the intent of working at it full time, possibly with a team. The quickest way for a company to fail is under funding - basically, getting loans or grants that don't fill thier needs no only through the development process, but through the marketing process until they have a pool of products capable of sustaining themselves with. In fact, go pick up Small Business Adminsitration help - there's a lot of stuff they tell you about, and the quickest way to get a "No" answer on a loan is to ask for too little money. The bank knows they'll never see the money again if they don't give you enough to survive on. And if you *DO* happen to go the route of getting a loan or grant that you have to pay back, don't forget to get enough money to do TWO products at least. Why? Because, if you are loosing a hunk o' change to the bank, gov, etc. from your product, you'll need to either have a AAA Game that rakes in bucketloads of money, or, you'll need to pay off the loan / grant with the money from the first product immediately then fund yourself with the leftovers to get the next product out, so that you can afford to keep developing games. Otherwise, you end up in the same cycle that many 'professional' game dev companies do - get funding for game, write game, sell game, get funding for game, write game, sell game, etc. That only results in the death of the company, since eventually you are garanteed to have at least one game that's not gonna sell as well as you expected. Plus, if for some reason the bank decides not to fund you, you can't get a grant, etc. for the next game - it's game over, close the doors.

Ok, more than one thing I guess... something else to consider is that many grants have also moved to a matching fund basis. A good example of this is Kansas's Technology Growth Fund. It's a 50% matching grant up to $100k - what that means is, you go spend money, and turn in your paperwork saying how much you spent. They hand you a check for half that amount out of thier fund that you applied for access to (and it's a grant, so you have to go through all the headaches there, and only a limited number of companies get into it of course.) This continues until you have reached $100k. Then you are on your own... execept that when you release your product, you have to start paying back into the fund based on a % of sales (something like 4% for this particular fund, IIRC.)

To me, the idea of starting out you company with having to pay back money is painful. That's why MRT has been such a long term, slow growth company. I've got no loans to pay back, no grants to pay back, and my credit card debt for the company is fairly small. When TZ is released, the only percentages lost go to the development team - the rest belongs to the company, and funds development of the next project.

Seriously - fund yourself. Take the time, work at nights, etc. Then, you'll afford to write the next game full time, without having to deal with the whole issue of "Hm - where are we getting funding for this one?" from.