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Sources of Funding > Industry-Specific Financiers - Pg. 61

Financing a Game Development Venture Angel Investors 61 Angel investors are wealthy individuals who like to find deserving young companies to support. The ideal angel is one with industry-specific experience and contacts who can advise the company as well as provide capital. Most angels have business experience (whether industry-specific or not) and can be a huge help in guiding new entrepreneurs through the hoops of running a company. Advantages: Raising money from angels can be a relatively quick process, since there is only one person to deal with. Most angels are content to advise, but do not necessarily want to control the company, and generally do not demand as much ownership of the company as institutional investors like venture capitalists. Disadvantages: Angels probably don't bring the same knowledge about the industry and develop- ment process as a publisher or game industry financier. Unless you know where to find them, you may be prohibited from soliciting them under the federal and state securities regulations (see the "Financing Vehicles: Regulation of Investments" section that follows). Industry-Specific Financiers As the game industry has matured, the risk (read: budget) of each development has increased and the financial industry has emerged with some models to address these risks. Investments have generally been in projects more than in companies. Two emerging models, both based on Hollywood film finance, are production companies and completion bonds. Production Companies Production companies position themselves between publishers and developers and function in a similar fashion to Hollywood film production companies. The production company solicits pitch-es for new games, usually new intellectual properties, and identifies a few promising projects. The