A Seriously Great Story and Why We Funded Them

We are often asked how companies get funded, why VCs make the decisions we make and what we’re looking for in entrepreneurs. I think this is a Seriously great example of how this process works for at least one VC — Upfront Ventures. But I’m guessing the narrative is similar elsewhere.

I first met Andrew Stalbow, the founder & CEO of Seriously in August of 2013. He hit me from two very trusted sources. On August 23rd, 2013 I had an email intro from my good friend and trusted source Jeff Berman who only sends me stuff when it is somebody he respects (ie a strong filter vs. those who send casual intros). On August 26th I had an equally effusive intro from Ynon Kreiz, also a friend, trusted source and also the CEO of portfolio company Maker Studios. So this was definitely an introduction I was going to take.

We met on August 28th, 2013 and I know this because literally the next day I wrote a blog post about how we love to fund startups where founders have accents in which I referred to my first meeting with Andrew (with a “fick” English accent) and his co-founder Petri Järvilehto with an even thicker Finnish accent and referred to my favorite Finnish curse word Perkele.

Andrew & Petri posed a question to me, “If Walt Disney were starting his company today, what kind of company would he build?” I thought that was a clever enough question to pose. Who wouldn’t want to emulate the extreme success of Walt Disney for the next 50 years? The Walt Disney Corporation. World’s best in telling stories to young people by building compelling characters that are loved through the generations and passed down from parent to child like a treasure.

Andrew & Petri posited that a modern media company would build lovable characters that span video games, online digital media, lovable plush physical toys and then ultimately find its way to the big screen. Why? Because the hundreds of millions that it takes to greenlight a theatrical film could never be absorbed by a startup and because they way we experience media & characters has evolved dramatically over the past 20 years to a point where the starting point for media is often digital, gaming or even graphic novel oriented. If you can engage massive online audiences they will come en masse to bigger budget theatrical releases.

And they had some first-hand knowledge to be able to assert this. Petri was formerly the head of the studio that build Angry Birds (Rovio) and led 250 people who built many of the gaming properties and characters the first iPhone users came to love. Andrew was head of North America and international head of licensing meaning he knew how to take these characters and blow them out into the endearing franchise that they became by extending the brand to the physical world and then ultimately to the big screen. They also had much experience before that. Andrew was SVP of Mobile at Fox Digital Entertainment which launched the very successful Simpsons online game (curse you for wasting tons of my kids free time!) and Petri was co-founder and head of creative at Remedy Entertainment that launched the hit PC games Max Payne and Alan Wake.

So when they spoke about character development, repeatable gaming experiences, bringing games to multiple platforms (in the industry we call this “Transmedia”) and physical products my ears naturally perked up. We met in August (so much for VCs taking the Summer off!) and had several phone conversations after that. By September 18th we were ready to bring them to a full partner meeting and as a group we were bought into the vision and the experience of this exact team to pull things off. They had all of their character development started (they showed up mock-ups) and the basic gameplay for Game 1 was through through (but not yet built).

We all loved Andrew & Petri and their vision. At Upfront we’re totally fine funding entrepreneurs who have done multiple businesses in the past — in fact we like it. And specifically we liked that they had exact domain knowledge in the field in which they were going to build a company. Domain knowledge gives entrepreneurs an “unfair advantage” over newbies. (on the other hand as I talked about here often first-time “naive optimism” leads to massively transformational breakouts).

As with any shop we have partners who are domain experts in their respective fields and inside Upfront Ventures the partner who looks at most game companies is Steven Dietz (who is also lead on anything retail or auto related and most fin tech stuff) so he took the lead role in the due diligence alongside the associate who is the biggest gaming expert — Kevin Zhang.

By September 26th we had submitted a term sheet which was signed on October 4th and financing was closed in less than 30 days. We did a full-court press led by Steven because once we decided this was the team we wanted to work with and this opportunity mapped to our belief system that content + tech will build a generation of great Internet companies. We funded about $2 million, which allowed a full team in Finland to be recruited for building the app and an international management team led from Los Angeles.

The results?

Massive success after just one week of launching that has continued into the third week (this week) with their first property. And because we saw so much potential over the last year as they build V1, Steven championed an internal financing to give the company enough money to start building out the next properties even before launching Best Fiends. I don’t think I can disclose more at this time (if the company has release public info Maybe Andrew or Petri could post in the comments section) but our future development looks great, our transmedia strategy seems perfectly crafted and even the digital games only part of the business has been an enormous financial success in just 2 weeks. Again, I think the company would slug me if released revenue data, but … wow.

So I hope that offers you insights into how companies move through the VC system. Intros. Vision. Domain Knowledge. Clear path to execution. Ability to build without a massive budget. Execute. Get more cash even before end proof. International team with development in a country known for building great games and tech companies plus leadership in our home court of LA, one of the monetization capitals of the country.

And Seriously. It has been such a pleasure to watch the teams success from sidelines. And to watch my partner Steven really develop a great thesis around where gaming and transmedia are heading into the future. I don’t want to take so much credit for Seriously, which really belongs with the team who is building the company and in our shop with my partner Steven & with Kevin. But since I have a blog and the history of my falling in love with Andrew & Petri’s vision was public and is relevant to how we make decisions I wanted a chance to tell all of their stories. And because the world is such a small place it turns out that Andrew’s son now plays soccer in the same league as my son so we got to oppose each other in a friendly soccer match (his son’s team won, we’re plotting revenge).

Digital. Plus physical. Parents & kids. A bit of fun plus a bit of education and a “give back” component (Seriously is working with the MalariaNoMore on Malaria education). This is so clearly our future. It is what Seriously was designed to do. It’s why we’re one of the biggest backers of Osmo, which just announced a $12 million round this week — having sold more than $2 million dollars of devices in just 60 days and rolling out in Apple stores internationally.

Seriously. Osmo. And one more big announcement to come in the next 30 days. Watch this space.

(as usual, Sunday post, not yet edited, racing to the airport …)