More money, money, money, money

More money, money, money, money

Currently, there is no one model for financing a digital entertainment project – or a digital company, for that matter.

Investors the world over all seem to look for the same things, whether you are in the old-fashioned widget business or the digital media business. Investors that I have worked with over the years all want to see:

  • A great management team – source world-class talent
  • A specific niche within the competitive landscape – you want some competition; Pepsi isn’t Pepsi without Coke
  • A solid business plan and revenue model – use standard financial models, especially when projecting crazy-strange digital ideas
  • Audience and Traffic; including community-building potential – valuations can be made or broken on these stats! It is worth noting that investors valued AOL customers at double what they valued Time Warner’s because of the profound AOL/ consumer relationship.

Of course, it’s just as important for entrepreneurs to carefully research and identify the right VC for their company. BusinessWeek recently wrote a great article on the topic, recommending that investors take into account (among other factors) the fund size, M&A/IPO exits and company shutdowns of VC firms in consideration.

Ultimately, creating a winning digital entertainment business is a trust-building enterprise. Amazon’s CEO Jeff Bezos would be the first person to tell you customer relationships must be earned — and re-earned — every day. Trust your fans. And, above all — as with all great entrepreneurs – trust your instincts.