Crowdfunding comes in all shapes and sizes these days. There are the heavy hitters like Kickstarter and Indiegogo, more charitable options like GoFundMe, and even investment opportunities through companies like Fig. A new service nearing launch,will allow people to invest in companies directly, instead of giving money towards a particular project or cause.
EquityArcade, which will fully launch at the end of June or early July, not only is a platform for companies to raise money for indie video games, it’s also a content platform. iDigitalTimes talked with Aaron Kaplan, chief executive officer and founder of EquityArcade, about how his new company will stand out from the big names in crowdfunding.
Kaplan says the biggest difference between EquityArcade and other services is the community he hopes to build around it.
“EquityArcade is a media channel that covers the commercial, cultural and financial aspect of gaming,” Kaplan said. “We garner a community of people interested in those topics and convert them over to our business platform which allows them to invest in the games they love.”
This emphasis on community is important, allowing people to become more engaged in a company or project. “We allow [potential investors] to get a deeper engagement to gaming, because it’s not like traditional crowdfunding,” Kaplan told iDigi. “They are actually investing and purchasing shares in the company and the games on the platform.”
While this ability to invest in a game instead of simply donating to production may sound similar to the website Fig, there are a few key differences. “We’re entirely indie,” Kaplan said. “We’re not raising money for companies that we know. We’re letting companies come to us that are awesome, we’ll look at the vetting process, and they’ll go on our platform.”
Another key difference is those who use EquityArcade will actually be buying shares of a company, as opposed to getting involved in a revenue sharing agreement. Kaplan couldn’t paint broad strokes about what every game’s campaign will look like, because each offer will be unique.
“Ideally what we would hope for is that you would have equity in the actual studio, so whatever shares you own in the studio, the studio makes a game,” Kaplan said. “But for the next game, you still own a share of the studio. Your ownership is higher than the game level.”
Making an investment into a company seems like a risky move, and Kaplan agrees. That’s where the content creation side of the site comes in. “I wouldn’t want to give a company my money the first time I saw them. It just doesn’t make sense,” he said. “So what we are able to do is build out a relationship with our community. We can also gauge interest in the community about a project based on how they interact with posts.”
Once a company or game gets enough attention, or EquityArcade finds a project it is excited about, the vetting process begins. “We find projects by going to game shows and conventions, we get an initial contact, then the developers go through a four-step vetting process,” Kaplan said. “Initially, there’s a first series of basic information like game name, company name and things like that.”
“The next step we figure out how much money you are trying to raise, what you want to do with it, what’s your plan for commercialization, how do you plan on making money for our investors,” Kaplan said. “If we see that they are viable as a company with both a monetization strategy and the ability to put something out there, then we move onto the next step where we open up the offering process.”
The last step is one final check-over before going live.
When a project goes live, people can invest in it. Again, each game’s campaign will be different, but Kaplan is anticipating a relatively low entry price to get yourself into the investment game. “We’re anticipating it will be $100 per share, and an investor can purchase a single share,” Kaplan explained.
“The idea there, if you think about how a game community goes, it’s good to have a lot of investors from one standpoint, because those people become the first adopters of your product. They’re also the people screaming out on social media ‘oh, hey. Check this out,’’ Kaplan said. “It will grow your quote unquote organic outreach. We’re hoping there will be as many investors as possible.”
With the launch of the crowdfunding service coming up in a month and a half, EquityArcade is finalizing the first round of game vetting. Many games have already applied, and more are on the way. The content side of EquityArcade is already live, with articles published daily.
So what do you think? Are you interested in investing in up and coming indie gaming studios? Do you think you’ll find yourself sticking to Kickstarter or staying out of crowdfunding altogether? Let us know your thoughts in the comments section below.
