PollenVC Pocket Gamer Connects London 2020

1. Ready to Scale? What to focus on before pushing the button 21st January 2020 Martin Macmillan - CEO

2. Ready to Scale? What to focus on before pushing the button About Pollen VC Now! 2 We provide lines of credit to developers which enable them to fund their business better and grow using paid UA Our model is a flexible and non-dilutive alternative to equity financing, allowing developers to retain control while growing their business Our mission is to get start-ups to think about capital efficiency, using the right type of funding for the right purpose

3. Ready to Scale? What to focus on before pushing the button Three Fundamental Questions 3 Do I have a machine? 1. How do I fund the machine? 2. How do I know when my machine is running at full capacity? 3.

4. Ready to Scale? What to focus on before pushing the button CAC and LTV Now! 4 Acquisition cost CPI, CPA, CPE etc. Whatever makes sense for your game LTV “North Star” metric How much will you earn from a player IAP/Ad revenue

5. Ready to Scale? What to focus on before pushing the button How to calculate LTV 5 https://ltvcalculator.pollen.vc

6. Ready to Scale? What to focus on before pushing the button Your UA Recipe 6 $1.00 invested results in $1.89 of LTV after 90 days

7. Ready to Scale? What to focus on before pushing the button Focus on ROAS Now! 7 $0.00 $0.50 $1.00 $1.50 $2.00 April 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 50% ROAS 75% ROAS Breakeven 100% ROAS 125% ROAS 150% ROAS 175% ROAS LTV Cut-off $1.89

8. Ready to Scale? What to focus on before pushing the button Most Expensive $ Least Expensive $Exhaust the least expensive bucket before moving onto the next one How do you fund the machine? Now! 8 Credit Line from Ad Network Cash at Bank (eg from free cashﬂow of an existing app) Credit Cards Lines of Credit secured against accounts receivable (AR) VC Funding

9. Factor in the cost of ﬁnancing ROAS ROAS 20% 1. Break out ROAS to a monthly return Ready to Scale? What to focus on before pushing the button

10. Factor in the cost of ﬁnancing ROAS ROAS 20% Financing 2% Break out ROAS to a monthly return1. Apply ﬁnancing cost on the same basis2. Ready to Scale? What to focus on before pushing the button

11. Factor in the cost of ﬁnancing ROAS ROAS 20% Financing 2% PROFIT 18% Break out ROAS to a monthly return Apply ﬁnancing cost on the same basis Focus on PROFIT!!! 3. 1. 2. Ready to Scale? What to focus on before pushing the button

12. Ready to Scale? What to focus on before pushing the button Focus on investment and return Now! 12 Increasing Ad Spend - Externally Financed Monthly ROI Monthly ROI 20% 15% 1 Monthly ROI Decreases

13. Ready to Scale? What to focus on before pushing the button Focus on investment and return Now! 13 Increasing Ad Spend - Externally Financed Monthly ROI Monthly ROI 20% 15% 1 Monthly ROI Decreases Financing Cost Decreases 2% 1.5% Cost to Finance Cost to Finance 2

14. Ready to Scale? What to focus on before pushing the button Focus on investment and return Now! 14 Increasing Ad Spend - Externally Financed Monthly ROI Monthly ROI 20% 15% 1 Monthly ROI Decreases Financing Cost Decreases 2% 1.5% Cost to Finance Cost to Finance 2 Still Generating Healthy Profit 18% 13.5% Profit Profit 3

15. How to know when your machine is running at full capacity

16. Ready to Scale? What to focus on before pushing the button Now! 16 CPI Acquisition costs rise over time Now! Installs $ Demand & Supply characteristics of UA

17. Ready to Scale? What to focus on before pushing the button Now! 17 LTV CPI Now! Installs $ Acquisition costs rise over time LTV falls as you scale Demand & Supply characteristics of UA

18. Ready to Scale? What to focus on before pushing the button Now! 18 LTV CPI Acquisition Costs Rise over time LTV falls as you scale Model the shape of your curve Keep buying until min ROI target achieved, eg X% margin Each genre has different characteristics Feed this into your overall strategy of the games you are building for target audience Now! Installs $ Demand & Supply characteristics of UA

19. Ready to Scale? What to focus on before pushing the button Now! 19

20. Ready to Scale? What to focus on before pushing the button Takeaways… 20 Get realistic estimates of CPI and LTV 1. Figure out how you are going to ﬁnance your growth 2. Keep monitoring and measuring your machine to keep it working at full capacity 3.

21. Thanks! martin@pollen.vc

PollenVC Pocket Gamer Connects London 2020

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