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Flush with capital, Stardock to set up multi-million dollar investment fund
Flush with capital, Stardock to set up multi-million dollar investment fund
April 11, 2013 | By Kris Graft




Thanks to a presumably massive haul from Stardock's sale of its Impulse digital distribution platform to retailer GameStop in 2011, the company said today it intends to start an investment fund for software and game developers.

Once this investment entity is established, the funds will be in the "mid-eight-digit range," Stardock CEO Brad Wardell told us Thursday.

It's a bit of a different route to financial expansion -- instead of acquiring more studios and talent, Stardock will remain the same size, and just invest in promising new external companies.

"I don't want Stardock to become a big company," Wardell said. "The bigger Stardock gets, the more time I end up spending with accountants and lawyers and business managers. Plus, we're in Michigan and it makes more sense to have these start-ups form where the founders are already located."

Wardell laid out four principles of its investment fund in the company's annual report today [PDF]:

We should use this capital to help the next generation of software and game developers.

We should use this capital to help found new game studios and new software ventures.

We will strive to have a minority share in these entities in the long-run.

These entities should produce things that will help future start-ups in the technology industry.

He said at these startups, he'd serve as interim CEO, with the long-term goal of him moving into an advisory role.

"We've done a few already but they're not far enough along in what they're working on to publicize anything," he said. "We're focusing on both games and software with this fund. But the game industry is on the cusp of a really amazing era where you can do truly great stuff as an independent developer again and the move to 64-bit and powerful, touch mobile devices are allowing for completely new types of games to be made."

Wardell said Stardock will be making more announcements in regards to the fund this summer, followed by news of funded companies and the projects they're working on.

"There are a lot of pieces that the developers will need to fully transition to the app-store/digital distribution model that we've seen evolve over the past couple of years," he said. "And there's a lot of amazingly talented people out there who understand this and have solutions to them. What they've lacked is capital and infrastructure to implement it. That's where I hope we can help."

In Stardock's annual report, he wrote, "If we are successful, the profit will follow. Even if we are not successful, some benefit will come from it."


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Comments


Jonathan Woodard
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Wow, this sounds amazing! I'll definitely be investigating as an possible investor.

I'm a little confused by this part… "He said at these startups, he'd serve as interim CEO, with the long-term goal of him moving into an advisory role."

Is the assumption that there are no qualified hustlers at gamedev startups? Also, how many companies can Wardell expect to effectively CEO at once?

Dave Long
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Have always been impressed with Stardock's approach to things, and this is just another example of it - I'd expect they'll be a few big things come from these little start-ups ;).

Robert Marney
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This is absolutely the right move for Stardock, which needed a new line of business and has always been better at small-scale bright ideas than AAA development.

Maurício Gomes
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I would love to be invested by Stardock!

But I already have a CEO with a degree in economics, master in finance and MBA in administration....

So, no thanks Stardock.

Michael Joseph
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(will "strive for") minority interest (in the long run so they say... and what about the short run?) and your CEO? I can totally understand why Stardock would want this. But it suggests to me they could essentially sack members of the founding team and bring in their own talent for "the sake of the project."

Read them contracts boys and girls.

Even so, it could be a really good arrangement but seems Stardock needs to take on more financial risk for the deal to make sense (eg. game that is much further away from playable and thus not a good kickstarter candidate and or a game that needs much more funding than can likely be received during a kickstarter type campaign.)

TC Weidner
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its called becoming a venture capitalist.

Michael Joseph
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indeed.

Joe Saputo
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This is a great Idea and I'm glade there doing it, I love the games they make, Sins of a Solar Empire is amazing I love playing it, But how do you get a hold of Stardock to try to be approved for something like this, b.c I would love to be funded by them, god knows I need it. Keep it up Stardock.

Neil Jones
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I like that stardock is staying in Michigan but I wish they would take on a couple more people. But I understand not wanting to become to big.

Linh Ngo
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The wording is vague, but I think he meant that they'd invest in companies wherever they're located, not just in Michigan. Besides, who the hell would want to move to Michigan. :) JK


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