Starting any new business is a risky endeavor, but set up by a group of serial entrepreneurs, early stage Finnish accelerator Lifeline Ventures, reckons it has the experience to back the right companies, and the cash to speed their success.
Heavily involved in the local games space, it also invests in health start ups.
We caught up with founding partner Petteri Koponen to discuss how Lifeline picks and chooses from the host of developers looking for investment.
Pocket Gamer: What investments does Lifeline currently support?
Petteri Koponen: We started investing in late 2009 and have since invested in six game companies: Supercell, Grey Area, Uplause, Grand Cru, GamesMadeMe and Applifier - the latter one being a cross-promotion network and not a game developer.
What does LifeLine look for in potential developers?
We look for three things. Firstly we look for the potential to become a category leader; we try to look beyond the first game.
The second factor is that the candidate must have a scalable team. The founders, or at least one of them, must be able to grow with the company, keeping a C-level (CEO, CTO, COO etc) role.
The final important factor is significant exit potential; with pre-seed investments this is quite hypothetical, but we need to be able to at least imagine a $100+ million exit if the stars are right.
The most important implication of these criteria is that such a startup is able to attract top employees, investors and advisers, significantly increasing the probability of success.
How do you balance the risk of loss when supporting these new start ups?
We invest so early that there is always the risk of losing an individual investment, but we don't focus on downside protection.
Instead, we try to ensure that our portfolio companies attract top advisers, investors and, of course, employees, which, we believe, dramatically reduces risk.
Naturally, having several investments in the portfolio further distributes risk.
How do you work in conjunction with government-based funding bodies such as Tekes?
Lifeline Ventures is one of the Vigo accelerators, which provides our portfolio companies with good access to public funding: the companies we have screened and invested in benefit from a lightweight process and have a high likelihood of receiving funding.
Typically, the companies apply for a public R&D loan right after our investment, enabling them to recruit the core team, start engaging users and get their first products to the market.
Later, almost all of our companies have raised seed funding from European or US-based VCs, and they can leverage this private money by applying for public subsidies for internationalisation and scaling commercial operations.
Thanks to Petteri for his time. You can find out more about Lifeline Ventures here.
Interview
When Matt was 7 years old he didn't write to Santa like the other little boys and girls. He wrote to Mario. When the rotund plumber replied, Matt's dedication to a life of gaming was established. Like an otaku David Carradine, he wandered the planet until becoming a writer at Pocket Gamer.
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