The 12 Best Ways to Fund Your VR Project
I recently had a thought-provoking conversation with a friend after trying an unreleased game that he’s working on. The game makes fantastic use of 3D space (I felt like I was Spiderman with a gun!). Although my friend has released several VR titles, his needs are the same as any other developer: he is looking for ways to fund his upcoming VR title.
Naturally, I offered to help and excitedly started researching ways for him to fund his latest endeavor. I am sharing my findings and have also categorized the list so that it can help you or filmmaker/developer you know that’s working on VR.
These are the 12 ways to fund your VR projects from the best to worst option:
1) Pilot Programs (Best)
This is the best option if you are able to sell your app before you build it!
There are many companies looking to be the first brand in their industry to expand into VR. This option requires connections with companies you’re selling to or having some next-level cold calling/emailing skills!
The idea is to close a contract first then hire a team to build the app.
I highly recommend this option to anyone working on utility/educational apps. If you need ideas on apps that make money, check out my blog post on 6 types of apps that companies pay for.
2) Partner with a Publisher / VR Cinema
This is the best option if you’ve got the resources and are building a AAA VR game or 360-blockbuster.
There’s many publishers that need content but I’ll list a few to give you a general idea of what to look for:
- IMAX — IMAX is building VR centers all over the world. I highly recommend reaching out to them if you’re building high-quality entertainment apps, especially with film production companies.
- VR Cinemas — Many companies (like &samhoud media’s cinemas) are building VR Theaters worldwide but they need will always need new content. Reach out to them if you’re working on film productions.
- VR Venture Capital Alliance — This option fits in multiple categories. The VRVCA is a fund is spearheaded by HTC Vive team and is comprised of 47 of the top Virtual Reality investors.
3) Join a Team
Joining a team is the best option if you dream of building something grander or are not a developer.
Rather than splitting your time between your day job and a passion project, you can build/join a team working on something that aligns with your passion. In an environment like this, you can quickly share your thoughts with others who can turn ideas into “reality”.
Also be sure to check out our list of the best VR opportunities.
4) Funding from Hardware Companies
This is the best option for VR developers with proven titles under their belt. This option requires you to know which initial platform(s) you’re building your app on.
Hardware companies are shouldering the financial burden of releasing your apps. In fact, many hardware manufacturers have funds dedicated to helping VR developers release content (and some programs have no exclusivity clauses!).
- Daydream — Google funds developers building unique VR experiences. (From what I’ve heard, these contracts require developers to be exclusive to Daydream for a set period.)
- Oculus Indie Game Dev Fund — Facebook’s VR fund to promote development for the Oculus Rift.
- OSVR Developer Fund — Razer’s fund to support developers building apps on open ecosystems.
- Samsung NEXT — Samsung fund and mentorship program for VR- and AI-related startups.
- ViveX’s — HTC Vive’s accelerator program which provides funding, mentorship and manufacturing connections.
5) Film Challenges & Hackathons
This is the best option if you need inspiration for new projects, need someone to help you build your idea or are looking for a team.
In addition to monetary prizes, many hackathons connect you with investors, give you free licenses/schwag and publicly post your work. Hackathons give you the added benefits of connecting with others, inspiring your creativity, giving you feedback on your ideas, providing you with assistance with difficult problems, introducing you to new gadgets/tech, etc.
The trick to hackathons/film challenges is finding out about the events before they finish! Luckily, there’s usually a constant stream of hackathons/challenges happening around the world, with ever increasing prize pools.
Some examples of organizations/events:
- 360-Film Challenges — Organizations like the Knight Foundation hold regular film challenges and offer monetary prizes to filmmakers.
- Educational Institutes — Events held educational institutions offers a friendly learning environment and access to companies that you’d normally have difficulty talking with. This is especially useful if you’re a student/alumni of the school that’s running the hackathon. An example includes reputable institutions like MIT.
- Hardware Manufacturers — VR hardware companies have accelerator arms that host regular hackathons. Samsung NEXT is an example (the next event is in New York). They typically prefer you to build apps for their hardware but I’ve seen many companies open to judging web VR apps as well.
- Independent Organizations — Many independent organizations organize regular hackathons throughout the year. Several hundred VR developers participate in these events and I highly recommend participating in a few if you haven’t already. Some examples include local hacks like VR Hackathon and remote ones like Archiact’s Global Game Jams.
- Phone Carriers — Companies like AT&T host hackathons regularly to spark innovation. They also have access to a multitude of mobile VR users if you can land a contract with them (Note: it usually takes 12 months or longer to secure a contract with phone carriers.)
Some risks with this option is that you don’t win any of the prizes offered and it becomes a major time suck.
6) Government Programs / Grants
This is the best option if you satisfy the government’s requirements for a particular program/grant.
This is extremely beneficial if you’re working on non-entertainment (i.e. healthcare, education, research, etc.) apps. The trick here though is to find out which programs/grants apply to you. I’ve listed a few options below:
- Canada Media Fund
- EdSim Challenge
- National Institutes of Health Grants
- Small Business Innovation Research Funding
Note: This can eat up a lot of time as government grants are highly-regulated and can require a lot of paperwork from you. Additionally, it’s highly competitive.
7) Game Engine Grants
If you’re using a game engine to build your apps, it doesn’t hurt to ask for a grant (especially if you’re a student!).
These are some game engine grants:
- CRYENGINE — Although Unity and Unreal have a significant market share, there are other options too. On the plus side, you’ll have less competition when trying to secure grants from smaller engines.
- Unity3D — I don’t have much info on their grants but I believe they especially help with educational projects.
- Unreal Engine — UE takes royalties from your VR titles. Rumor has it that they re-invest the royalties as developer grants.
8) VR Arcades
This is the best option if you’re working on a multiplayer experience. (VR arcade owners want multiplayer experiences so that gamers bring friends to the arcades.)
Most people don’t realize but there are several monetization strategies for VR Arcades:
- Arcade owners license your app for X devices. (Many platforms, including Steam, helps you with the paperwork required for arcade licensing.)
- Arcade visitors choose from a list of VR titles and you get revenue based on the time your game is played.
- You pay arcade owners to rent a dedicated space and you get revenue based on the time your game is played.
- Arcade owners purchase exclusive licenses.
The riskiest part of this option is that you can’t predict your revenue. Another issue at the moment is that you can only use this method to fund app updates and not the initial creation of your apps.
This is the best option if you’re doing something that’s unique in the VR/AR space or have a “defensible strategy.
Some notable resources to find VCs are:
- Ask VR investors your questions with my form
- Categorized list of almost all VR-related companies by tipatat (see the “VR Funding & Resources” section).
- Descriptions of VR VCs from the Virtual Reality Times
- List of VC’s that have previously invested in VR/AR (select the “Firms, Funds” tab)
There are 2 major risks with this option: 1) you can waste a lot of time with investors and 2) they can own a large piece of your company.
Tip: The best way to start the conversation with an investor is to get someone from one of their portfolio companies to make an introduction for you.
10) App Subscriptions
This is the best option if you update VR content on apps you publish regularly.
If users have subscriptions to your VR app, make sure to update app content continuously. You can use subscription services like Patreon to receive paid subscriptions though I believe subscriptions will get easier and more appealing with Viveport’s Netflix like subscription rollout.
11) Crowd Funding
This is the best option if you can make a high-quality product video.
The major risk of crowd funding is that very few VR companies have made enough money to fund their VR initiative. Additionally, crowdfunding can act as liability on your balance sheet in an investor’s eyes. If you decide to go this route, don’t use this as a solo monetization strategy!
Some places you can post your app idea(s) are:
Other things you should be aware about with crowdfunding is that you have to constantly update your audience and keep them happy.
12) Financing/Loans (Worst)
This is the riskiest option on this list and I highly recommend against doing this where possible.
As with almost every software endeavor, it’s possible to bootstrap your app but the ROI on VR development is negative for nearly all VR developers. (Also check out Joe Radak’s post on the real costs of making a VR game.)
This option can bankrupt your personal assets and waste a significant amount of your time. Banks typically require business plans, financial projections, pitch decks and a lot of make-work documents.
Summary — The 12 Best Ways to Fund Your VR Project
- Pilot Programs
- Partner with a Publisher / VR Cinema
- Join a Team
- Funding from Hardware Companies
- Film Challenges & Hackathons
- Government Programs / Grants
- Game Engine Grants
- VR Arcades
- App Subscriptions
- Crowd Funding
The goal of this post is to create a comprehensive list of ways to fund VR projects. There’s no shortage of ways to fund your VR apps so don’t take on the financial burden by yourself and risk your and your family’s future. The more projects we build, the closer we get to the slope of enlightenment!
Let’s work together to make VR mainstream!
Don’t forget to share this with friends working on VR projects to help make their dreams a “reality”!
Always be learning,