Archive for the ‘business’ Category

Funding Terms Now Public!

Friday, March 11th, 2011

As a followup to our panel at the Independent Games Summit where we discussed our desire for more transparency in the funding process, we are now making our funding agreement public. The purpose of this reveal is to give developers a measuring stick to evaluate other funding offers they may receive.

There are two significant ways in which our agreement diverges from the typical game funding agreement:

1.  It is short and simple. For smaller games, we see no reason for a funding agreement to be a massive document written by lawyers for lawyers.  Our agreement is 3 pages long, and comes with a companion document that explains what each section means and why it’s there.

2. It is developer friendly. We do not ask for any IP rights, we time limit the debt, we recoup at 100%, and take a revenue share that is proportional to the amount we put in (1% per $10k).

Below are links to the agreement and the companion document. Please note that these are documents that we will change over time to reflect what we learn about how to best work with developers.

Indie Fund Loan Agreement [Scribd]

Indie Fund Loan Agreement Companion [Scribd]

Comments and feedback are welcome, of course.

The Worth(lessness) of NDAs

Tuesday, July 20th, 2010

It’s been almost two weeks since we opened up the submission process and the response has been fantastic, if somewhat overwhelming.  We’ve gotten over 70 applications so far and we’re working through them as best we can.  Please be patient with us… we will get back to you.

One thing that has come up a couple of times is a request to sign an NDA, and that’s actually the focus of this post.  We do not sign NDAs and would like to share the rationale behind this decision.

Fundamentally, NDAs don’t make sense in the context of smaller games (call them casual, indie, whatever).  Here’s why:

Enforcement – In order for an NDA to be worth anything more than the paper it’s printed on, a developer has to be willing to enforce it, and capable of enforcing it.  That means retaining lawyers and investing significant amounts of money, time, and emotional energy. Even if a developer actually chooses to invest their time and energy in enforcing an NDA (at the expense of actually making games), they are unlikely to have the financial means to do so, or they wouldn’t be seeking funding in the first place. For deals worth millions of dollars, NDAs make sense because enforcing them in court could result in huge payouts.  For deals worth $100k the risk/reward ratio means a legal battle is a terrible bet.

Ideas and Execution – Great games  are great because they were well made, not just because they were based on a good idea. Shadow of the Colossus, Portal, GTA,  [insert your favorite games of all time here] would not have been great without the super talented teams and visionaries that made them.  If a developer relies on their idea rather than their ability to execute it well, in the vast majority of cases they’re already in deep trouble.  Ideas are a dime a dozen, everybody has game ideas that have the potential to become great games, but it’s the execution that matters, and an NDA can protect only ideas, it doesn’t protect a against someone making a better game.

Trust and Instinct – If you feel uneasy about sharing your ideas with a potential investor/colleague/acquaintance/whoever, that should serve as a warning to you.  Stay away from people you mistrust. Millions of years of evolution have trained your brain to recognize what’s good and bad for your survival, so trust your instincts.  If someone’s out to screw you, they’ll screw you with or without an NDA.

In short, don’t waste your time building straw houses, just stay away from wolves.