Fig

Fig is an investment crowdfunding platform dedicated exclusively to providing investment opportunities in the development and production of video games. While Fig does include rewards-based funding options similar to Kickstarter, the platform also offers a royalty investment option for some of its campaigns, allowing investors to capture a portion of future game sales in the form of dividends.

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Fig was acquired by Republic (link to review) in April 2020. The platform will continue to operate, but will do so with the substantial benefits and synergies stemming from Republic’s infrastructure, financial backing and brand. More information on the acquisition and return data for Fig deals can be found here.

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Fig's model sets itself apart by both providing game developers with a money to develop their new game, as well as assisting the developer with crafting a marketing and PR strategy to help drive sales (and investor returns). This model is preferable for developers for two reasons. First, funding through a royalty model lets developers maintain independence – a consideration of significance in a space where sacrifices must be made and control ceded if one is to work with established video game developer incumbents. Second, many of the individuals investing in the developers are also users of their games. By creating a well-aligned incentive structure with members of their core user demographic, developers are well-positioned to benefit from significant word-of-mouth marketing and valuable user feedback.

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Fig's site features a robust set of informational materials provided to educate and introduce transparency into the investment process. While Fig is open to both accredited and non-accredited investors, the platform is likely best-suited for gaming enthusiasts who will also value the rewards-based component of the site and access to the games themselves. For those without expertise in the gaming space who are solely interested in the return profile of their investments, this is likely not the platform for you. That said, given the considerable growth of the gaming industry and Fig’s recent acquisition by Republic, we see the potential for the platform to evolve to a point where it offers compelling opportunities for investors solely focused on competitive financial returns.

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Pros

• Fig is backed by a solid syndicate of institutional investors--most notably Greycroft Partners and Spark Capital--with subject matter expertise and prior investments in crowdfunding platforms
• Fig's offering is largely unique in that it's the only dedicated crowdfunding platform which offers access to video game investments
• Fig offers interesting upside for those with expertise in the gaming industry and the ability to identify signals and precursors to success which indicate potential out-performance in listed projects
• The interactive entertainment (video game) sector is seen by some as a highly defensive space which would fare relatively well in a recession because it is one of the cheapest entertainment mediums on a total cost divided by time consumed basis

Cons

• Investors without an interest or expertise in gaming are likely better off pursuing opportunities on other platforms. On a deal-by-deal basis, much like equity investments in early-stage companies, performance outcomes are likely to be highly binary
• The unpredictable nature of royalty-based dividends, which are only paid once sales reach a certain threshold, presents an undesirable return profile for some investors.
• While the site's deal flow is adequate enough to not merit concern, given the explosive growth of the gaming and e-sports markets, it seems as if interest in the platform should be picking up more substantially. With the recent Republic acquisition, we hope to see deal flow increase significantly.

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