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Need advice / opinion - joining my friend - mobile games company.


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#1 b43am   Members   -  Reputation: 108

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Posted 25 May 2014 - 04:43 PM

Hi guys

 

I'm  about to make  huge decision in my life and  have mixed feelings on what I'm about to do.

I would appreciate if you  could share your opinions / advises if you've been in similar situation or if you have strong understanding of how mobile games companies operate.

If you have  no experience /  idea about this business and just want to share your opinion, please  take a second and ask yourself if it's going to add anything meaningful.

 

Just to make it clear  -  My friend is ok with me asking those questions (what  I highly appreciate) as long his  / company  identity is not  going to be compromised.

 

Facts:

·         Friend of mine asked me to join him in his small mobiles games company.

·         Currently he is working on tower defence type of game and hire few contractors for various tasks.

·         He is an experienced programmer  and good friend.

 

What friend of mine brings to the table:

 

  • A product that's in the final stretch before being released and already has a live test case which already demonstrates great LTV on iOS. The complexity of the product including server backend, fraud/hack prevention, encryption, messaging systems, scalability, performance tuning, user retention improvements that have already been done.
  • He has almost 4 years of experience in the mobile market and this is his third company -  so he brings a reasonable experience and failure history (i.e. what not to do) under his belt.
  • Strong possibility of being featured at Apple and Microsoft
  • Investment that he made  so far (almost $ 20 k)

What I'm bringing in to the table:

  • I'm  highly skilled  senior 3D artist working for one of the top AAA studios (over 8 years in the industry).
  • Management experience (Lead role in the past)
  • Re-doing   (and leading  other artists  )  existing environment art  (which is not  great)
  • Creating  - icons, marketing materials, splash screen, particles, tweak materials and re-render the characters if necessary.

What I'm being offered:

 

Experience Phase
 

2.2.1 During the Experience Phase (3 months), the time You work should be logged with a time tracking tool such as https://www.toggl.com/.

 

2.2.2 This agreement can be terminated by either party within 5 days notice during the Experience Phase.

 

2.2.3 The Company has the option of buying the Works contributed by you at USD 30 per hour in case this agreement is terminated during the Experience Phase.

 

2.3 Equity Earning Phase

 

2.3.1 During the Equity Earning Phase (and in case it is reached) you will be earning the equivalent of 5% of the Company’s shares split and distributed along 12 months. In other words, at the end of each calendar month you will have earned 5/12% of the company’s shares.

2.3.2 During the Equity Earning Phase, the company may or may not be able to afford extra payments for your working hours, depending on its financial situation. If during the Equity Earning Phase no such payments are made, nothing is owed by the Company to You.

 

2.3.3 In case You terminate this contract within the first 12 months, the Company has the option of buying your shares earned so far back at GBP 3000 per shares earned per month (5/12%).

 

2.3.4 In case the Company terminates this contract within the first 12 months, has the option of buying your shares at the value of 5 times your shares earnings in the first 24 months and 10 times your shares earnings thereafter.

 

2.3.4.1 In case the value computed in 2.3.4 does not exceed GBP 3000 per your shares earned by month, you are have the option not to sell them.

 

2.3.6 This agreement terminates automatically at the end of the Equity Earning Phase. At the end of this phase a new agreement needs to be made between the two parties prior to continued collaboration.

 

Whenever the company can afford, I will  receive an Art Director Salary.

Whenever it's a good time to, the company will issue dividends.

 

 

 

Like  I mentioned on the beginning, I have mixed feeling about this but  I'm not going to point out what I'm concerned about -  to not bias your  opinions.

Please let me know what do you think about this deal ?

 

 

Thanks


Edited by b43am, 25 May 2014 - 05:03 PM.


Sponsor:

#2 Tom Sloper   Moderators   -  Reputation: 10178

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Posted 25 May 2014 - 10:56 PM

If you have a decision to make, I recommend you make a decision grid. http://sloperama.com/advice/m70.htm
If you decide to join his company, you should have the terms of the relationship set forth in paper (a contract). http://sloperama.com/advice/article58.htm
-- Tom Sloper
Sloperama Productions
Making games fun and getting them done.
www.sloperama.com

Please do not PM me. My email address is easy to find, but note that I do not give private advice.

#3 Orymus3   Crossbones+   -  Reputation: 10700

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Posted 26 May 2014 - 09:41 AM

Looks like a serious offer at least. Sure, it requires a leap of faith.

 

My only concern: he is your friend.

I would never get in business with a friend: not because they are not skilled, but because one day you may need to make a "us or them" decision, and I would hate losing a friendship over this (which I have previously).

 

I can't contribute much, you're your own blocker for that decision. Tom is exactly right: make your decision grid and choose for yourself (knowing risks and rewards) and then live with your decision.



#4 b43am   Members   -  Reputation: 108

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Posted 26 May 2014 - 11:05 AM

Thank you guys for taking the time to reply.

I will do now exactly that  (Decision grid)

 

Thanks



#5 snacktime   Members   -  Reputation: 308

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Posted 27 May 2014 - 03:40 AM

I was lucky enough a few years back to be the first employee at a social games startup that produced around a dozen profitable games before being acquired, then we went on to make the 2012 social game of the year.  So I have some idea of what this industry is like.

 

I would prefer to see someone with some experience working at a studio that had some success.   Could be a partner or even an advisor. 

 

I don't like the offer.  It's not structured right.  The more standard approach would be you start earning equity right away, and it vests over a longer period say 2-4 years.  You would also have a cliff, normally around the 1 year mark.  

 

That contract tells me that the founder is basing this on just this one game.  If so an equity contract might not be the right thing here.

 

Equity should always start to vest immediately in early stage startups like this.  A cliff is the right tool to prevent people from leaving early with vested equity.

 

I see red flags here myself.   Without a long term plan I have to figure it's for this one game.  Most of these games  peak at around 6 months.  Most start to die at around 9, assuming they had some popularity to start with.  Your chances of monetizing your first game well are fairly slim without someone that has experience doing that.  And on top of all that there is no clear plan for how you will get cash out of your equity.  It's just not something I would quit my day job for.

 

If it was me, and I really wanted to do this thing, I would offer to go on part time, maybe until the game launches.



#6 JDX_John   Members   -  Reputation: 284

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Posted 27 May 2014 - 07:56 AM


He has almost 4 years of experience in the mobile market and this is his third company
He's started 3 companies or worked at 3 as an employee before starting his own?Someone who keeps starting new companies would concern me.

www.simulatedmedicine.com - medical simulation software

Looking to find experienced Ogre & shader developers/artists. PM me or contact through website with a contact email address if interested.





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