Getting a Loan, Grant, or Any Kind of Handout!
by Jerane Alleyne · in General Discussion · 09/17/2001 (8:24 pm) · 10 replies
Hey all,
I've been up at the crack of dawn (well, I'd have to have had slept for that! I've just been up period!) looking into getting loans, grants or any kind of money from the government or other organizations. I've been examining the SBA (Samll Business Association), and have discovered quite a few resources and forms used in obtaining money for small startup business.
My question is, have any of you had any experience in trying to get startup money for your companies, and what pitfalls you may have come across, warnings, and any overall advice in the area? I'm onthe verge of writing out a business plan and having something presentable for the purpose of taking over to my local SBA office, not to mention getting all those on our team together to form a real tried-and-true gang.
Any help would of course be much appreciated!
Thanks in advance!!
I've been up at the crack of dawn (well, I'd have to have had slept for that! I've just been up period!) looking into getting loans, grants or any kind of money from the government or other organizations. I've been examining the SBA (Samll Business Association), and have discovered quite a few resources and forms used in obtaining money for small startup business.
My question is, have any of you had any experience in trying to get startup money for your companies, and what pitfalls you may have come across, warnings, and any overall advice in the area? I'm onthe verge of writing out a business plan and having something presentable for the purpose of taking over to my local SBA office, not to mention getting all those on our team together to form a real tried-and-true gang.
Any help would of course be much appreciated!
Thanks in advance!!
#2
Yeah, I plan to write it out myself. I went to Quicken.com, and they have some software that helps with setting up a business plan model, as well as the drafts they have of business plans from other companies. I wish there was one more geared to creative development however...
I thought about venture capitalists very early, but with the way our economy has been going lately, I didn't have too much faith in that route. I believe a site called www.garage.com deals with venture capitalists. I was going to go back there after my plan was done.
One of the things that was a concern to me was that I'm wondering how working out of my home and having a "virtual team" (at least for now...its my main goal to set up a main HQ, and at the very least, use sub contractors and a strong source for production) will look on the initial business plan. I'm going to be accounting for all on our team soon so I can make it as pretty as possible :)
Thanks again!
09/18/2001 (8:58 pm)
Thanks for the info! Yeah, I plan to write it out myself. I went to Quicken.com, and they have some software that helps with setting up a business plan model, as well as the drafts they have of business plans from other companies. I wish there was one more geared to creative development however...
I thought about venture capitalists very early, but with the way our economy has been going lately, I didn't have too much faith in that route. I believe a site called www.garage.com deals with venture capitalists. I was going to go back there after my plan was done.
One of the things that was a concern to me was that I'm wondering how working out of my home and having a "virtual team" (at least for now...its my main goal to set up a main HQ, and at the very least, use sub contractors and a strong source for production) will look on the initial business plan. I'm going to be accounting for all on our team soon so I can make it as pretty as possible :)
Thanks again!
#3
09/19/2001 (2:54 am)
garage.com doesn't invest in game companies.
#4
I'm annoyed, but not suprised really :)
Anyone know of any venture capitalist sites or organization that don't look down on game companies, or at least up and coming ones?
Thanks :)
09/19/2001 (3:58 pm)
Doh!I'm annoyed, but not suprised really :)
Anyone know of any venture capitalist sites or organization that don't look down on game companies, or at least up and coming ones?
Thanks :)
#5
09/19/2001 (6:13 pm)
The state of the game development commercial field is this as I understand it: Many of the game publishers no longer look for outside(independant) games to publish. They instead have moved the development of games "in-house". The disadvantage is you have all these marketing types deciding what kind of games should be made. If you can get the interest of a game publisher with your idea(demo) then you can get money to finish a game. I understand it is increasingly hard for independant game companies to get the publishers attention. I don't know where you get the money to make a demo though.
#6
09/20/2001 (7:42 am)
Yah, that is true. No one likes risks in today's markets. They like guaranteed money, and that's that. You can try a bank if you can PROVE to them that you will get loaded of your next game but that is hard to do. There interest rates are lower though. A line of credit is also good. They lend to almost everyone if you look good and have a nice plan. Their interest rates aren't that bad either, at least not here in Canada :) Cya. 
#7
My recommendation is to get together with a couple of friends or like minded people that have expertise in different areas. For instance, if you are a designer, then come up with the best design you can, then show the rest of the world you are serious and why they should work with you. You need to recruit one good programmer and one good artist in order to get your demo rolling. Then your team can use that demo to bring more people on board.
Indie game development is much like being in a small rock band, i.e. you get to figure out how to make a living until you hit the big time. Take a look at the television show "Before They Were Stars" to see the kind of determination many rock and movie stars had to making it in their industry. Making it as a game developer takes no less determination or creativity.
Imagine, for a moment, Bruce Willis going into a bank 20 years ago and asking for a SBA Loan in order to finance his movie career. The banker would have laughed at him, and that is exactly what they should do to start up game development companies.
I'm not trying to be cruel here, but if you look at any of my replies to this type of question, the answer is the same. Eat beans and weenies until you can prove you are able to do the job. Keep expenses low and recruit a very small core team of like minded individuals, and self fund your creation.
Jeff Tunnell GG
09/20/2001 (10:50 am)
You can't raise venture capital money for game development, banks won't loan for it, and all other "standard" forms of raising capital are closed as well. You may be able to get friends or family members to loan or give you money, but if you do, make sure they understand that it probably will not come back.My recommendation is to get together with a couple of friends or like minded people that have expertise in different areas. For instance, if you are a designer, then come up with the best design you can, then show the rest of the world you are serious and why they should work with you. You need to recruit one good programmer and one good artist in order to get your demo rolling. Then your team can use that demo to bring more people on board.
Indie game development is much like being in a small rock band, i.e. you get to figure out how to make a living until you hit the big time. Take a look at the television show "Before They Were Stars" to see the kind of determination many rock and movie stars had to making it in their industry. Making it as a game developer takes no less determination or creativity.
Imagine, for a moment, Bruce Willis going into a bank 20 years ago and asking for a SBA Loan in order to finance his movie career. The banker would have laughed at him, and that is exactly what they should do to start up game development companies.
I'm not trying to be cruel here, but if you look at any of my replies to this type of question, the answer is the same. Eat beans and weenies until you can prove you are able to do the job. Keep expenses low and recruit a very small core team of like minded individuals, and self fund your creation.
Jeff Tunnell GG
#8
We are actually tryign to rpoduce our demo now. Its holding together with genuine interest inthe project, a few bribes, and some empty death threats :)
I actually am pretty confident that we can build up an exceptional demo on the resources I mentioned, its mostly for the aftermath of our first demo, and to propel us into the next stage, which would be the setup for our long term plans.
Better get myself another job....
Thanks :)
09/20/2001 (11:28 am)
Heh heh,We are actually tryign to rpoduce our demo now. Its holding together with genuine interest inthe project, a few bribes, and some empty death threats :)
I actually am pretty confident that we can build up an exceptional demo on the resources I mentioned, its mostly for the aftermath of our first demo, and to propel us into the next stage, which would be the setup for our long term plans.
Better get myself another job....
Thanks :)
#9
Second, Chances are that you will still strike out most of the time, even with a developed budget and timeline with highly skilled and experiance professionals committed to the project. Most investors that I have met won't even give you much more than the time of day without some sort of technology demonstration of what you are planning and what you are capable of doing.
Third, Finding investment is all who you know that can help open the right doors to make things happen. So keep networking and talking to people, you never know where they might lead.
Logan
09/21/2001 (2:01 am)
First, I doubt many investors really care where the people are located (or that you are working together online), the big thing that they will be looking at is: are these people capable of doing what they are saying? Second, Chances are that you will still strike out most of the time, even with a developed budget and timeline with highly skilled and experiance professionals committed to the project. Most investors that I have met won't even give you much more than the time of day without some sort of technology demonstration of what you are planning and what you are capable of doing.
Third, Finding investment is all who you know that can help open the right doors to make things happen. So keep networking and talking to people, you never know where they might lead.
Logan
#10
Make sure your team members have "day" jobs, at least part time. There's always misc software or hardware someone will need.
If members of your group has a particular skill or talent that could be turned into extra $$$ on the side, such as web design, art, etc; help them with it.
If your group will be coming out with a smaller product while working on the bigger project, sell that smaller product to help generate $$$ for the group. (Unique icon packages, calendars, custom mini games for local clients, such as churches, arcades, amusements, movie theatres etc; )
Never keep all of your cards on the table. Keep some back for the group later on, if something goes wrong.
Your team may get further along gathering $$$ by taking out personal loans or using personal credit cards for larger purchases for group members. Just remember to be thrifty and penny pinching.
That was my 2 cents...
xhadoe
11/05/2001 (8:05 pm)
Here's some things that might help others...Make sure your team members have "day" jobs, at least part time. There's always misc software or hardware someone will need.
If members of your group has a particular skill or talent that could be turned into extra $$$ on the side, such as web design, art, etc; help them with it.
If your group will be coming out with a smaller product while working on the bigger project, sell that smaller product to help generate $$$ for the group. (Unique icon packages, calendars, custom mini games for local clients, such as churches, arcades, amusements, movie theatres etc; )
Never keep all of your cards on the table. Keep some back for the group later on, if something goes wrong.
Your team may get further along gathering $$$ by taking out personal loans or using personal credit cards for larger purchases for group members. Just remember to be thrifty and penny pinching.
That was my 2 cents...
xhadoe
Brock Ferguson
If you can't get a loan from the SBA (they are pretty tight), you could try a Capital Venture Corporation but they are even worse and your business plan should bet at least 75 pages. If you can get capital, their interest rates are a bit higher. It is too bad, a demo or something would be really nice because a lot of studios go to these people looking for "just a little bit of money" and never get it (been there, done that).
Good luck to ya! any more questions?