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paulwarren

Investor options

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Is it essentially up to the agreement between yourself and an investor as to whether the investor gets?

1) All profits (or lack of) that a game does
2) Indefinite profit sharing between development team and them.
3) A set amount ( i.e. double, triple, 10x the investment amount)

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> 1) All profits (or lack of) that a game does

A contract can specify how the profits (losses) are shared.

> 2) Indefinite profit sharing between development team and them.

I would advise against illimited clauses. Put a cap on time / budget / responsibilities / liabilities. Always. Especially liabilities.

> 3) A set amount ( i.e. double, triple, 10x the investment amount)

A contract can specify what happens when results are achieved before a deadline (ex: bonus) or not reached within the specified deadline (ex: penalties).



Talk to a lawyer.

-cb

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Is it essentially up to the agreement between yourself and an investor as to whether the investor gets?

1) All profits (or lack of) that a game does
2) Indefinite profit sharing between development team and them.
3) A set amount ( i.e. double, triple, 10x the investment amount)

Yes.
The most common deal is the indefinite profit share. That is how most publishing deals work. The publisher (investor) pays the developer to make a game and they each get a % of the money made from sales. As long as the game sells both parties get their %. In some cases the deal may include a stepped %, meaning that the developers share goes up the more the game sells. As with any term in a deal it is subject to negotiation. I have negotiated deals with investors that take a multitude of different forms. It just depends on the individual case.

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