Transparency & Funding?

One of the things that we wanted to do with Wonderspark was give people some insight into what things are like at a game startup. How do we make decisions? What kinds of things do we do? Why do we do them? We've spent the last few months working primarily on two things:

  1. A prototype of the core mechanics of Alter/Ego. This is a multiplayer card-battle game that can be played on iPhone. It's not "the game" we want to make in the end, but it is the core mechanic (or the "30 seconds of fun" if you've been keeping up with the previous posts) that we need to work that everything else will be built upon. This is making huge progress, and will be in a closed alpha within a few weeks.
  2. Funding

I've been in charge of #2, since I can't write code to save my life, and over the last few months, we've talked to a pretty wide variety of folks, and received a variety of responses. Some discussions are ongoing, a lot of venture capitalists have said they're not interested in games right now (whether it's a reaction to Zynga, or whether it's a reaction to the current difficulty of breaking into the iOS market these days), or they're waiting for us to show them more.

All are understandable responses, and we're still diligently addressing all possible options - but I had a very interesting discussion with a friend of mine who said that it's very likely that venture capital is not the right option for us. His reasons were very specific, but in general, it came down to the fact that with venture capital comes inevitable pressure to sell, or to do something you don't want to do, and that fundamentally, that's not why we're starting Wonderspark.

One of the main reasons we started Wonderspark was that we wanted to do this forever, and we didn't want to be pressured to sell or go public if we were successful. We also take a very non-standard approach to how we run our team, and how we approach development. Almost nothing we do aligns with the traditional game development mold, and I strongly believe that this is why we were successful before. But it's very hard to communicate, because on the surface, our process looks like chaos & disorder and carelessness. But that couldn't be further from the truth - it's just that we focus on different things than most traditional game developers, and doing so comes with certain costs.

Our process and our trajectory is not predictable. It is not something we can lay out a plan for. Much of it is highly reactionary - intentionally. I think if you're doing anything that is dictated by a quarter-long roadmap in the world of iOS, you are completely missing the point.

Another friend brought up a framework for raising money we hadn't considered (no, it's not Kickstarter - Kickstarter doesn't work well for 'games as a service' in general, and for other reasons, it's not a good fit for us), and it's interesting. Instead of taking venture capital, that traditionally then forces an "exit" (an IPO or acquisition), instead we'd take on investment that is then repaid via dividends. It's more "democratic", more accessible, and structures potential reward in a way that is more aligned with what we hope to do. It also eliminates pressure to "exit" so that people end up financially rewarded. For both the people on the team and the potential investors, everyone's goals are much more aligned.

But it's weird, because it's not how any game company, as far as I know, has been funded, and that raises two issues: First, I don't know why, and second, it means that we've got to figure out a lot of stuff on our own. At a time when startup incubators have the whole funding process down to such a degree that you can download term sheets off of the internet & use them without even running them by a lawyer, we're trying to figure out if we can forge our own more-or-less unique path.

I think we're a little too early to tell you exactly how it's gonna work - there's still a lot of detail to hammer out, and we're gonna be getting some feedback from experienced folks who can hopefully help us see if this isn't completely bonkers. But it's weird. Seems we can't do anything the normal way. ;)