We know from speaking to our developer members in particular that getting access to money can be a major barrier to starting up a new business.
Yet whilst it remains difficult, there are willing investors out there, pots of public money available and schemes in place that can be a major help.
One of our jobs at UKIE is to make sure our members know how to access any available money and here’s some of the main ones that all fledgling businesses should be aware of.
ABERTAY PROTOTYPE FUNDING
The prototype lab and centre of excellence at Abertay University (a UKIE member) encourages small developers across the UK to apply for grants of up to £25,000 to support the development of prototypes.
They often launch competitions with different partners – we are going to do one with them, for instance – which ask for specific ideas that might be solving a problem or a challenge for someone. This is a great way to get a new idea that might have legs off the ground.
Business angels are private individuals who can club together and look for interesting start-up businesses with great ideas.
The amount invested by angels can vary but typically it can be between £25,000 to £750,000. Angels are often successful business people, who can also lend you their experience and networks, like mini mentors.
Angels can include family or friends of the start-up who want to help get a company off the ground. You should also make sure any angel investors that you do work with use the SEIS scheme.
More people are discovering crowdfunding to fund their projects. Crowdfunding tests the appetite for your games, giving you a handy armoury of metrics such as ‘likes’ for an idea to present to potential investors, commissioners or publishers. The term is used to refer to three different methods of raising funds – think about which best suits your needs.
Donations model: People give money to a company or project either for no return or in return for some form of non-financial reward (a pre-order, a credit in the game, or a jolly with the developers).
Lending model: Investors provide money through a loan with a requirement that the loan is repaid with interest.
Equity investment model: Investors provide money in return for a share of equity in your business.
There are more than 40 crowdfunding platforms operating in the UK and many others across the world, some specialising in games, like Gambitious and Indiegogo. Most operate on a donations or loans basis but a few have obtained permission to operate an equity model.
www.indiegogo.com | www.kickstarter.com | www.gambitious.com
PRODUCTION TAX CREDITS
These aren’t in place yet, but from next April the UK’s games industry should have its own long-awaited tax breaks system in place.
We’ve been helping the Government to understand that the new scheme must support all kinds of games and sizes of businesses so they stoke growth from small and/or independent developers, existing bigger studios and inward investment from multinational companies.
Make sure you know when it launches, and make sure that you use it as much as you can. We’ll be giving practical help on the tax credits, so please get in touch if you need help.
Publishers are still a major source of investment in games and interactive entertainment. They also provide essential skills to get a game to market.
UKIE represents all the main publishers currently in the UK, as well as some of the newer kinds of publishers emerging which specialise in mobile games, so if you want to speak to a publisher drop email@example.com a line.
R&D TAX RELIEF
The Government’s Research and Development (R&D) scheme gives tax deductions to UK companies doing R&D. Lots of games businesses do R&D, sometimes without realising it.
UKIE members can get free advice from R&D tax specialists Jumpstart about how R&D tax credits can benefit their businesses by emailing: firstname.lastname@example.org
SEED ENTERPRISE INVESTMENT SCHEME
This is not a pot of money, but is a very good incentive for people who want to invest in your business. The Seed Enterprise Investment Scheme (SEIS) only launched this year, and is designed to help small, early-stage businesses to raise money by offering them a range of tax reliefs to individual investors.
Jo Twist is CEO of UKIE, a trade body for the UK’s interactive entertainment industry, which exists to champion the interests, needs and positive image of all those across the video games and interactive entertainment industry. www.ukie.info
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