had a pretty good week. Over the weekend we did some social stuff...
on Saturday night, we attended Fuschia Shock (see the GinohnNews
for a report on that, and on the movie we saw with them), while
on Sunday we got together with most of my family for some birthday
celebrations. Here we see my brother Jeff's twins as they open
the unbirthday gifts we gave them. Note the bowl James is wearing
as a hat - it was amazing how persistently that thing stayed
on his head! He's 3 now, and insists on being referred to as
"LoveyCup Cowboy". Sharon (my goddaughter) is opening
a really cool snake we found at Ikea, and it was a big hit: the
two of them were very entertaining as they ran circles around
the house, pulling that snake between them.
But then the weekend was over, and we had to get back to work
on the problem that has gradually been crushing our skulls: MONEY.
Naturally, there's that income tax thing, which those of us who
procrastinate are all currently dealing with; but we've also
been confronting our general need for additional funding. Things
are going very well for Looney Labs, well enough in fact that
in order to grow, we need more money. So, we've decided it's
finally time to start considering the idea of Venture Capital.
During all our years as Icehouse Games and most of our time
as Looney Labs, we've
been totally unwilling to even consider the idea of getting involved
with a venture capitalist. There were many reasons for this...
partly it was standard issue Game Inventor's Delusional-Paranoia:
the fear that we'd be giving up control of our company to someone
who might turn Evil (footnote: we founded our first company shortly
after seeing the movie Tucker:
The Man and His Dream), combined with naive preconceptions
about the value of Our Brilliant Ideas as compared to the value
of Funding; but mostly, I think it was a simple lack of confidence.
While we certainly believed that our ideas had the potential
for huge success, we were realistic enough to understand that
our ideas were just that, ideas, and that until we had a proven
product it would be premature to ask someone else to invest a
lot of money in marketing it. So for many years, game publishing
was just a hobby for us, something we did just in our spare time.
But over the past ten years, our games have matured, our marketbase
has grown, our skills and abilities have expanded, and our belief
that this is a viable business venture has solidified. Last year,
Kristin and I took what we called the leap off the cliff, and
quit our high tech day jobs to pursue our dream of running a
game company full-time. Since then, we've been using our savings,
and the sterling credit our DINK lifestyle had given us, to fund
our operations, with the hope that we could get profitable before
the money ran out. And unfortunately, while we've had an absolutely
incredible year, the money is nevertheless running out. The problem
isn't a lack of success... if anything, it's the reverse. Things
are going really well: our games are selling briskly, we have
an ever-increasing fanbase, stores everywhere are calling us,
asking how to carry our stuff... and we've got more ideas for
new games than we've even got time to play, let alone publish.
And that's the problem: we don't have the funding we need to
expand, and we couldn't get all the work done ourselves even
if we did. We need help, both financially and in terms of manpower.
Soon we will need to reprint all of our games, in order to
meet the demand we've been building for them, and the larger
we can make those print runs, the less it will costs us per unit,
and the better our profit margin will therefore be; but this
also requires more up-front capital, and therein lies the problem.
Moreover, we're running out of places to store inventory in our
house, and in a month or two, when 3 pallets of new Fluxx decks
are supposed to arrive, we're gonna need to rent some space somewhere.
As for sales, we've signed up a lot of new stores and distributors,
but even so, our volume is nothing compared to what it could
be if we could afford to pay for real advertising and had someone
working in our Sales & Marketing department, helping Kristin
make all those follow-up phone calls she never seems to have
the time to make. But worst of all, I've invented this great
new game, and if we don't get more funding, we may not be able
to publish it this fall (i.e. in time for this year's holiday
shopping season). We have to give priority to keeping Fluxx,
Aquarius, and Icehouse in print, no matter how much we may want
to publish something new. (Secret Message to everyone who's fed
up with all the secrecy surrounding my new game: at this time
next week, I shall tell you what it is!)
So, we need money in order grow. This is not news; back in
January, our business-student friend from Texas, Leslie
Burgoyne, spent her winter break with us, helping us writing
our business plan, and this week, we finally filled out all the
paperwork necessary to officially request a business loan from
our bank. But as we look at the expenses we face in the near
future, we are forced to realize that we're not going to get
as much money as we need from our bank. Banks look for collateral,
and while we've got lots of valuable game inventory and lots
of semi-valuable TSI
stock, it's doubtful that our bank will offer us as much as we
So, we're finally considering Venture Capital. And as we've
been thinking about it, two quotes have been sticking in my mind.
The first came from Mike Webb, of Zocchi Distributing, with whom
I spoke at Toy Fair. He was telling
me that another company had struck some sort of funding deal
with his, and that this was really great because it was going
to allow them to properly fulfill their vision of how to do business;
the second is from Dale, who asked us at ToasterCon
if we'd thought about how we might benefit, not just from the
Venture Capitalists' money, but from their accumulated knowledge
and experience. And I had to say, I'd never really thought about
it that way before... we've always just been fearful of letting
outsiders come in and take over. So, this week we changed our
minds: For the first time ever, we are interested in Venture
Capital. Trouble is, we don't know much about it. So the question
of the week is this: How do we go about finding a venture capitalist
we can work with, someone who like games, understands the internet,
and agrees with our manifold corporate philosophies? This is
the task at hand for the coming weeks and months, as we begin
our search for funding in earnest.
how was your week?