I met Sean, the co-founder and CEO of Extra Dimension Games, in January 2021, when he enrolled in my online course, Pitch Your Games Company. We had calls about his games studio that was doing a cute merge game. The KPIs were OK but not good enough to raise a round. He had an impressive team with an EA background, and I thought if they’d keep working on the ideas they had, they would eventually be able to raise a round.

Sean and his team continued working on the game and changed the core and metagame. Things started shaping up, and Sean went out to pitch VCs. Unfortunately, no one got excited.

Over 2021, Sean spent time keeping the team together, bootstrapping the business and eventually getting the game to a position where the KPIs had significantly improved. To me, they were some of the best in the industry. He was ready for another round of VC talks.

I went back to my email conversations with Sean in early 2022. I’d asked: “What has changed in the game which allowed the KPIs to improve so much?”

Sean explained that they’d spent time on adding new art, a new world, and new characters, drastically changing the core loop and other gameplay systems. They believe they’d taken the game to a place where the player could get a feel for the world and get into the game’s flow.

After that, additional updates had improved the KPIs even further. As Sean puts in:

“[We did] content tuning, fixing progression blockers, massive performance improvements, and a few visual tweaks. Effectively a polish pass, and we haven’t gotten into economy tuning or onboarding cleanup yet.”

By April 2022, Sean had gotten a term sheet from Sisu Game Ventures, which led Extra Dimension Games to raise their pre-seed round. The amount has been disclosed publicly. Sean also raised from angels and smaller funds to accompany Sisu’s investment.

My angel syndicate invested $200K with 34 individuals participating and the individual checks ranged from $2.5K to $20K. I always write an investment memo for the syndicate. Here is a redacted version of the memo I wrote on Extra Dimension Games in March 2022:

Investment memo (redacted)

You can view Extra Dimension Games’ pre-seed pitch deck by going here:

Extra Dimension Games pitch deck (redacted)

Now in September 2022, I asked Sean some questions as I wanted him to reflect on the experience of doing a pre-seed fundraise.

Joakim: You recently raised a pre-seed round. Can you tell the newsletter readers how it went?

Sean: In the end, the process was simple and refreshing – but it was a journey to get there. We spent a long time bootstrapping to establish the company and ship games. Ultimately, we couldn’t achieve our goals without additional capital and support, so we sought investment.

Although this is my second mobile studio, it was my first time raising. I was nervous because it was a new process that seemed complicated and high stakes. This pushed me to learn as much as possible on pitching, venture, and trajectory – and to set a high bar for what I saw as needed.

Eventually, I did some cold and warm outreach and began conversations. When these started, we had numerous iterations of a vertical slice showing consistent improvement, a strong founding team, multiple games shipped, and a data-backed thesis for the market and company trajectory. We quickly ticked all the boxes for what investors were looking for and allowed them to quickly assess the opportunity.

We didn’t move forward with everyone I spoke to, but we did have competing term sheets. We had to decide: there was a mix of strategic & VC, with different raises & valuations. It came down to what kind of company we’re building and the culture we want.

We picked Sisu to lead because our values are aligned, and they’re strong early investors. We value advice and community and like to operate similarly. Sisu led, but we didn’t raise our whole round with them. We sought angel investors to flesh out the round, and since we had a strong lead – the deal was pre-vetted, making other deals simple. Though an extra step – having angels with a breadth of experience to draw on is very valuable.

When you look back at the early steps in the fundraising process, what have been some key learnings on preparing for a fundraise?

When having conversations, be methodical and run a process. Target a lead first, and know who you’ll be talking to and when. Communicate your goals and set expectations for how the process will proceed.

Avoid assumptions by building as much as possible. Games are intensely creative. At the idea stage, people will imagine differently than intended. Prove what your team can do and what the game will be by building a focused playable. What’s essential and what the team values will show while demonstrating a taste of what’s to come.

I value bootstrapping first to get company basics out of the way. There are a lot of noisy challenges to starting a new games company. The more progress you make, the more risk you take off the table.

The deck isn’t as important as all the information and preparation that goes into making it. Slides should be a distillation of all the building, testing, and prep work. The real value is in the experience of doing. Being able to talk about what you did & why, where you’re going & why.

Know what stage you’re raising for and what the expectations are. Similarly, know what deal terms you want and why.

When in doubt – ask. Share, get feedback, pose questions, cold call, whatever. Not everyone can help, but there’s a strong community in gaming, both founders and VCs. Leverage the experience of others to help.

Pitch to yourself! You ensure the presentation works properly (how you navigate slides + appendix on Zoom etc.) and get a sense of the words you’ll use. Where do you get tripped up? How’s the flow? Ideally, you read nothing on the slides and use the material as prompts. Bonus points for elaborating or condensing how much you talk about a topic; this will help when answering questions too. And you’ll get derailed with questions, so focus on knowing the material and how you want to discuss it. Don’t write a script.

Avoid getting pulled into traditional startup/pitch content around SaaS/B2B. B2C is very different, and games are even more so. Educating an investor on the business model of games is challenging and makes a difficult pitch. Focus on investors who know games – you’ll get better reception, clearer pitches, and more support and resources.

Most importantly, the deck doesn’t have to be perfect. Early investments are more about the team, the approach, and the possibility of making genre-defining hits. De-risk as many concerns as you can with your team & actions, and just get started.

Did you ask investors for feedback on the pitch, and how have you used the feedback?

I had access to a lot of B2B mentors and angels locally. Spending time with non-gaming people was a big distraction and didn’t give me feedback or direction that helped a F2P games pitch.

I moved past that and shared with people in my network – mostly executives and M&A contacts. That feedback was early, before we had the game, and was pretty uniform – dull, generic, lacks personality, sounds like x/y/z, etc.

Part of the issue was focusing on the slides and not the content. Catchy words don’t help you address follow on questions. I got lost trying to pattern match what others had done rather than tell our story. It’s a subtle but important shift: the content comes from the story, not the other way around.

I was nervous and unsure, which led to holding on and editing rather than looking for feedback. I had some conversations in summer 2021 supported by an early build but didn’t expand to other discussions. If I could go back, I would do more outreach and ask for more precise feedback on the pitch + game.

Free-to-play mobile is not as hot as web3 and other buzzwords right now. How do you plan to keep growing the game and the company in the current market?

Ultimately our path to success is through demonstrating great results, not worrying about buzzwords. We aim to succeed through our principles, which drive our products & culture.

There are four main topics here: the first of which is to stand out. Players can bounce between games in a genre without paying because they get the same experience everywhere. The audience is willing to spend but needs a great value prop. Make great games that are easy to play while staying grounded in familiarity—layer in depth and variety to get meaningful spend and a truly unique experience.

The second is longevity. Now more than ever, retaining players is paramount. To achieve this, you must have a combination of extensibility, playability, and meeting player needs. We build games with a lot of creative surface area, intending to do live-ops for a decade. The preparedness lets us build viable long-term businesses with many opportunities for new content and systems.

The third is tenacity. The only constant in mobile games is that it changes. It’s been that way since I co-founded my first studio in 2004, and I believe it will always be true. That’s why building a company that knows how to solve problems is essential. Problem-solving is a core piece of our culture that informs how we build and interact. Development is nimble and iterative, ensuring we play ideas often and constantly contact our audience. We work collaboratively through trust, independence, advice, and scrutiny.

The fourth is people. Not just talented professionals with a strong desire to learn and improve, but humans with lives outside the studio who feel respected and rested enough to do their best work. We have an unlimited vacation policy (that actually gets used) and an empowered, bossless work culture that prioritizes an individual’s ability to contribute. The journey to make great games is long, but that doesn’t have to come at the cost of burnout. Treat people like professionals, with the respect and autonomy that goes along with that.

From an investment perspective, I’m less worried about buzzwords than players. Trends come and go, but strong businesses are always viable. Having a connection to players, the ability to create great content and the muscle memory to adapt to changes sets us up for success. The proof is in the tasting, and we aim to let our results speak for themselves.

Any final advice for founders seeking to raise a pre-seed for a game studio?

Here’s some bottom-up advice on building a fundable studio.

Founding a startup is personal. Nobody has made your company before; the studio you create is unique. Draw on others for inspiration, but there is no playbook. Make your uniqueness a focal point.

Spend time on culture and principles. It won’t help build a demo or pitch to investors – but it will help you build a better team and company.

Understand expectations. Both for yourself, what you want to build, and what the funding & execution roadmap looks like. Align the team on objectives, and set the tone with investors for what you want & where you’re going.

Your game doesn’t matter unless players like it. Games are never done. Players will tolerate an “alpha” experience, and you can get a lot of signals from rough games. Figure out the most important structural piece of the experience and make it quickly. Ship, advertise, measure, refine.

Don’t fear failure – learning from mistakes is still progress. Don’t repeat mistakes; you can show a pattern of refinement and improvement that’s still valuable.

Minor changes will have small results. You’ll probably need a big change if you’re trying to improve metrics dramatically. If you don’t have big changes left and need considerable KPI improvements – you should probably pivot.

Communicate effectively. Remove assumptions and be succinct. Be able to answer questions on everything, but ask questions where needed. Don’t be afraid to look inexperienced – be frightened of lacking the courage to learn.

Find support. Help comes in many different ways, but you need an outlet to share problems. Like-minded founders, meetups, peer communities, whatever – allow yourself to talk honestly about essential company issues. I find saying them out loud makes them easier to address, and having advice and feedback to draw on goes a long way.

It looks easier than it is. Don’t get lost in success stories; don’t fool yourself into thinking nobody else had problems. Everything is hard – persevere.

The first money is tough. The pack will usually not signal interest until one investor takes the plunge. Know this and incorporate it into your process of finding a lead investor. Be timely and organized – not desperate. Set yourself up for success with preparation and get a good deal.

I fully admit there’s revisionist history in this advice – but it’s what I’d want to tell myself if I had a time machine. Starting a games company is a fantastic experience if you want to do it. Be mindful of the stress it can cause, and be realistic about the time and energy required. But the beauty of startups is that you learn & do more than you can anywhere else and have the opportunity to create something unique.

Joining a great startup can be equally fulfilling – where you get to work without silos and discover skills you didn’t know you had. Not every startup is great, so do your homework and scrutinize. Be honest about what you want and what you can add. There are great opportunities out there; seek them out and find out what you can accomplish.

Best of luck.