For most startups, approaching venture capital (VC) firms and angel investors is a go-to strategy for funding. But in the video game industry, securing capital comes with added complexities. Equity and exit-based financing which typically comes with a 50 to 100 times ROI expectation is not a business model that works well with the video game industry or any of the entertainment industries, for that matter.
Only a few game types — like multiplayer or live service games or casual mobile games with a strong social angle can sustain the revenue streams needed to satisfy this model, often spanning 5 to 10 years of profitability. This is why VCs and angels don’t tend to invest in companies developing PC/console games, hybrid casual games, or web-based games.
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