Our goal was to create a model that provides early prototype funding to founders that publishers or project based funds won’t typically back.

We’ve worked hard to design a system that gives those creators maximum optionality to raise future funds, work with publishers, or team up with platforms and doesn’t draw money out of their company at the wrong time.

After investing an enormous amount of time working through options, we decided that we should take an equity stake in the studios we back, but we will not ask for a fixed profit or revenue share that begins at a specific time. This is risky for us but we believe it’s the right decision because it allows creators to take money out of their company as dividends, only when they decide to do so.

Traditional profit sharing models force you to take money out of your company on a fixed schedule (example: 24 months after receiving the funding). Starting on a pre-specified date you are required to begin paying x% of your monthly revenue or y% of your profit to the investor or publisher. If these payouts start at a bad time for the studio (example: when the company is still growing quickly and needs the cash) they have real potential to dampen growth or put the studio in danger. This is the reason we’ve decided to leave the timing up to the creators. In addition:

• We only want to get paid when the founders are also getting paid — ideally, a very handsome amount when the time is right.
• We want to be in the founder’s corner for the long-term, rather than backing in a way that feels more like a loan or project-based financing where we would need to recoup quickly.

Our approach aligns backers with creators, is clear and straightforward, plus allows us to be in your corner for the marathon that’s to come.

We believe we’ve designed an approach that allows us to succeed when you do.

Traditionally, funds have consisted of “unicorn-hunting”. Investors are looking to fund the next Facebook or Oculus. If a traditional fund backs your business and it gets to $50m in revenue, generating $20m in profit year over year, it’s considered a miss.

On the surface that might seem ludicrous, but they’re looking for a certain kind of return – one that, with the traditional approach, can only be achieved by looking for businesses that have the potential to provide a 100x or 1000x return. On average, a unicorn is found less than 3% of the time.

You might think of what we’re doing as a cooperatively owned accelerator for game developers and creators with a long startup tail. We harness the tools available while writing new rules for backing sound and sustainable studios that promote a more inclusive creative economy.

The Moonrise Fund approach allows us to provide returns without sacrificing a company’s runway, the wellness of the team, or the studio’s potential to raise additional capital with publishers or other funds (should you decide to do that).

The Moonrise Fund is focused on opportunity, not obligation. We’ve designed around the idea that creative studios need more flexibility. The goal is to add value and energy to our partnerships, not to take.

Most accelerators or bootcamps – think Y-Combinator, TechStars and hundreds more– run for three months and founders have to relocate to a specific location. But there are tens of thousands of creators who aren’t able to relocate due to family, personal obligations or don’t have exactly three months of full-time capacity available.

Another difference is that companies don’t need to sell for the Moonrise Fund to work. We’ve designed the model to work with dividend payouts, similar to those of worker owned co-operatives, so founders can retain ownership of their company for the long-term.

This also means they can choose a healthier pace and don’t need to force growth. We like to think of this as building a sound and sustainable studio. That is, a studio that has reasonable working hours, provides ample days away from the office, and generally doesn’t burn out the people involved.

Creators can live anywhere, but we recommend that your company is either formed as, or converted to a US, Australian, or Canadian entity.

We’re interested in backing creators from other countries in the future, but due to the challenge/cost of navigating laws in any of the 200+ countries in the world, it is hard for us to promise backing teams outside of the US, Australia, and Canada at this time. That said, know that we’re working on building our capacity in order to back more international studios.

There is no need to convert your company to a US corporation before submitting or talking to our team. If there’s interest, you’ll hear from us and your submission will be considered at the top of our list when we’re ready to expand further into new territories.

One thing to consider for those living outside the U.S. is that we will hold regular calls during U.S. working hours (Central Time), so your time zone should make that feasible.

Advisors play a key role in the success of the Moonrise Fund and its creators. Please take a moment to fill-out our Moonrise Advisors interest form to let us know about your expertise, availability, and rates (if applicable). It takes less than 10 minutes and If it’s a good fit, we’ll reach out!

You can fill out this form to get updated when spots become available. I’ll also send you a Backer’s kit with additional information on the fund, co-investment opportunities, tax considerations, and external articles for you to dig into.

If you have questions, feel free to email to Evva Karr at evva at heydotcom titled “Moonrise Fund Backer” in the subject line.