Angel investors - 55pixels

[Iamnotkloot]

Hi - been sent details by the angel investment network on 55pixels - the offer is below:

BAFTA Winning Game Studio
Target: £1,000,000 Min per investor: £10,000
55pixels, the multi-BAFTA winning, long-established game development studio, has developed two profitable games which are ready for global release. The offer is a 3 year convertible loan note with 18% interest pa with management investing 10%.
Award winning long established games studio
Profitable and fully developed games titles
18% annual interest payment and option to convert to equity
Experienced management team investing 10% of this round
Fully ownership of intellectual property, no dependencies


Doing a bit of diligence and cant find much about them except that their big games are Crater Craft and Bin Weevils. Anyone know anymore or are investing themselves? Sounds intriguing to me but can't find enough on them at present...….

[Simpo Two]

Or they could go 'phut' and you lose the lot?

[CzechItOut]

Is that all the information you have to go on? No user stats or better still profit/revenues?

Just looking on the Play Store it seems that Bin Weevils and Pirates vs The Deep has 10k downloads and Snakes in Space 1k. Hardly stellar numbers.

[Iamnotkloot]

CzechItOut said:

Is that all the information you have to go on? No user stats or better still profit/revenues?

Just looking on the Play Store it seems that Bin Weevils and Pirates vs The Deep has 10k downloads and Snakes in Space 1k. Hardly stellar numbers.

Well, revenues are "some £15m in revenues from its current flagship game BinWeevils." which tells me a bit but not much. Other info:

Both of the company’s new releases incorporate unique multi-faceted monetisation models, variously combining In App Purchases, Advertising and Membership subscriptions, which offer the ability to deliver a positive return on capital deployed within 90 to 180 days of player acquisition and as much as a 3x return in 360 days.

There is significant room to further optimise the monetisation metrics to achieve a positive ROAS (Return On Advertising Spend) in as little as 20 days.

The company plans to deploy the capital raised in a measured way to limit risk whilst iteratively optimising user acquisition and monetisation models to achieve maximum return and strong cashflow. There is good headroom in the plan and excellent coverage.

[Simpo Two]

When someone has to write stuff like that my bullst alarm goes off.

Only invest what you can afford to lose. If in doubt, run away.

[JulianPH]

I've had a look at their accounts and those of the businesses run by the directors.

It could, of course, be a fantastic investment. I wouldn't touch it though.

Firstly, 10 directors have resigned (most in the last few years) and only 5 out of 15 remain (or have been newly appointed).

Secondly, they have c. £650k of assets yet want to borrow £1m (so there is no collateral).

Thirdly, the company is not listed on a recognised stock exchange and neither in the bond (loan note). This means there is no liquidity should you want your money back.

Fourthly (I'm regretting not using bullet points now!), Why raise £1m if you are only going to 'invest' £100k (10%). This makes no sense whatsoever and no one does this.

Finally (you see what I did there!), You have absolutely no compensation if it goes wrong and the 10% investment amount is likely to be a fee to brokers they are using to raise the cash (otherwise it makes no sense).

Basically, they are saying we have £6.50, so will you lend us £10 if we promise (with no guarantees whatsoever) to offer you £1.80 a year whilst we still have your money. The offer to convert this into equity is a play on the potential upside (but is meaningless), as I raised in point three.

So I would not invest. As said, it could be brilliant, but you are just lending a small company money that it cannot raise itself. Even if you got all your coupons (interest) you could still lose half your money if they default.

You know the company better than I do, so your choice. These are just my feelings.

Edited for typo

Edited by JulianPH on Wednesday 27th June 17:26

[deckster]

Bin Weevils used to be huge in an "everybody's kids are playing it, but we haven't worked out how to make any money out of it" kind of a way. Fast forward to today, the first part isn't true any more as nobody's playing it these days, but it looks like they think they've worked out the second bit. Which, apparently, is to beg.

I don't have a barge pole, but I'm tempted to go and buy one just so that I have one to not touch them with.

[Heres Johnny]

I tuned out when they said they had two profitable games ready for release

Firstly if they're not released, they're not profitable

And secondly, marketing aside which may be significant in itself, the development of the game is where the investment is needed. If its done what they spending a million quid on? Doesn't fit with managed and controlled - if you can earn cash that fast, and you're burning it slowly in a measured way, you don't need so much

[anonymous-user]

Heres Johnny said:

I tuned out when they said they had two profitable games ready for release

Firstly if they're not released, they're not profitable

And secondly, marketing aside which may be significant in itself, the development of the game is where the investment is needed. If its done what they spending a million quid on? Doesn't fit with managed and controlled - if you can earn cash that fast, and you're burning it slowly in a measured way, you don't need so much

Good points.

[bigandclever]

Heres Johnny said:

I tuned out when they said they had two profitable games ready for release

Firstly if they're not released, they're not profitable

And secondly, marketing aside which may be significant in itself, the development of the game is where the investment is needed. If its done what they spending a million quid on? Doesn't fit with managed and controlled - if you can earn cash that fast, and you're burning it slowly in a measured way, you don't need so much

This may well be semantics (“ two profitable games which are ready for global release“) but it’s possible to have a local market release of a game and then release globally. Eg Honor of Kings is/was China’s biggest game (200 million monthly players) that was then globalised as Arena of Valor, with North & South America first. But without knowing the titles, it’s a bit moot.

[Heres Johnny]

bigandclever said:

This may well be semantics (“ two profitable games which are ready for global release“) but it’s possible to have a local market release of a game and then release globally. Eg Honor of Kings is/was China’s biggest game (200 million monthly players) that was then globalised as Arena of Valor, with North & South America first. But without knowing the titles, it’s a bit moot.

Ok, maybe, but then use the profits to fund further roll out.

Although when it comes to computer games, I’m not convinced all markets like the same thing.

[Iamnotkloot]

I'm guessing that's a 'no' from everyone then!

I got my kids to download the games/apps yesterday and try them out - they weren't very impressed (though at 9 years old they may be too old for the target demographic - though how much money can they make from younger kids?).

[Dromedary66]

Iamnotkloot said:

though how much money can they make from younger kids?).

They'll be relying on parents with app store settings that allow in-app purchases without a password.