Pitch Deck Teardown: MegaMod’s $1.9M seed deck | TechCrunch


Welcome to our one hundredth pitch deck teardown! This week, I’m having a look at MegaMod’s seed-stage pitch deck. MegaMod appears to be the newest darling of the gaming trade and simply pocketed a cool $1.9 million, bumping its post-money valuation to $27 million. With a mission to revolutionize the sport creation course of, MegaMod says it plans to splurge on refining its go-to-market technique and testing out its retention and monetization mannequin.

In an trade the place creators are sometimes tossed apart like yesterday’s lootboxes, MegaMod swoops in with a heroic promise to place them entrance and heart — a knight-in-shining-armor vibe that’s barely sullied by the very first display screen on the corporate’s web site.

Nothing shouts “we love creators” greater than asking them at hand over the rights to every thing they create on the platform. Not one of the best first impression.
Picture Credit: MegaMod (screenshot)

So, what’s the true story behind MegaMod’s pitch deck that charmed traders and secured that $1.9 million? We’re about to dive deep, peeling again the layers of this pitch to see if it’s a vital hit or simply one other NPC within the startup panorama.

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Slides on this deck

MegaMod’s pitch deck clocks in at a good 13 slides. That’s fewer than we sometimes anticipate, however who’re we to evaluate? Oh, wait, judging is actually the purpose of those articles. By no means thoughts, let the judging start.

  1. Cowl slide
  2. Drawback slide
  3. Product portfolio slide
  4. Product Overview slide
  5. Product slide 1
  6. Product slide 2
  7. Product slide 3
  8. Product slide 4
  9. Worth proposition slide
  10. Traction slide
  11. Monetary projections slide
  12. Group slide
  13. Ask and Use of Funds slide

Wow, 4 product slides? I can virtually assure that traders don’t care this a lot about your product. OK, superb. Let’s get began.

There’s one factor to like about MegaMod’s pitch deck

Dedicating 29% of a pitch deck to product slides isn’t nice, and it’s clear that the remainder of the deck isn’t that nice both. However there’s one factor that’s.

A daring ambition

PDT 100 1.9M Seed Megamod
[Slide 2] The corporate appears to imagine that there’s 50 million folks cursing the heavens that they will’t make video games.
Picture Credit: MegaMod

Technology Z treats gaming prefer it’s a faith, not only a interest. They’re glued to their consoles, VR headsets and cell screens, diving into digital worlds with the type of dedication normally reserved for cult leaders. This era doesn’t simply play video games, although; they’re constructing whole universes, forming guilds and trash-talking their technique to the highest of leaderboards. Gaming isn’t simply one thing they do; it’s who they’re — and regardless of all of this, making video games is difficult.

Is that an issue? I don’t know. I type of all the time assumed that making video games was onerous, however MegaMod appears to put a special guess: The corporate makes it clear that by means of its full suite of merchandise, it’s making it stupidly easy for these gaming fanatics to create their very own video games. It’s an fascinating guess, banking on Gen Z’s insatiable thirst for self-expression and DIY perspective. Why simply play video games when you may construct them?

I like a slide that makes me query base assumptions, and this slide did that. Wait, why does it appear so onerous to construct video games? Can video games inbuilt a day be any good? I reserve judgment, however I can’t assist however admit that I’m curious!

Three issues that MegaMod might have improved

I wrote just a few of drafts of this paragraph during which I attempted to discover a silver lining, however in a nutshell: I can’t imagine this firm managed to boost a cent, not to mention a good chunk of change.

The pitch deck reads like a ransom word scribbled by somebody who forgot their glasses. Very important data? Lacking in motion, and what little information they do present is flimsier than moist tissue paper. I’ve seen school entrepreneurship pitch decks with extra substance.

Based mostly on this deck alone, it’s a miracle anybody invested in any respect, which most likely factors to the truth that the corporate has one thing else going for it. I’m struggling to see what, although. Both it has some critical allure or its traders have a wild humorousness.

It’s doubtless that there’s one thing to the corporate that doesn’t come by means of within the deck. Both the founders know the traders, or there’s a bit of traction or a go-to-market mechanic that isn’t explored within the deck. However that’s the enjoyable factor about this collection: I’m not speaking to traders or founders; I’m critiquing the deck primarily based on what’s there, particularly as a result of a pitch deck ought to be capable of stand by itself.

What the hell is occurring with this product?

PDT 100 1.9M Seed Megamod s4
[Slide 4] MegaMod’s constructing out fairly a product suite.
Picture Credit: MegaMod

Slides 4-8 of MegaMod’s pitch deck are an train in being overly bold, making even essentially the most seasoned entrepreneurs cringe. As an alternative of specializing in a single product and even a few well-developed choices, MegaMod has determined to throw every thing on the wall to see what sticks. Six merchandise, together with a recreation engine, AI coding instruments, a skins editor, a prop editor, an in-game library and a social platform. And if that wasn’t sufficient, they’ve acquired a advertising and marketing software (MegaGames), instruments for streamers, distribution instruments and extra. It’s as in the event that they went on a procuring spree on the tech retailer and determined to purchase one among every thing, simply in case.

Right here’s the factor: Startups want focus. Spreading your self skinny throughout so many product traces is a recipe for catastrophe. Any single one among these merchandise — be it the sport engine, the AI coding instruments or the social platform — might be totally viable startups on their very own. Every requires devoted sources, specialised information and a transparent technique. As an alternative, MegaMod is attempting to juggle all these balls without delay, and it’s onerous to see the way it gained’t drop just a few — or all — of them. The shortage of a targeted method screams hubris greater than it does competence.

One might argue that combining all these instruments right into a single suite may leverage community results, making a cohesive ecosystem that’s better than the sum of its components. However right here’s the kicker: The deck doesn’t make that argument. In any respect. We’re left guessing at how these disparate merchandise ought to work together, not to mention how they’ll generate income. It’s unclear what the monetization mannequin is for any of this. Is the corporate banking on subscriptions, one-time purchases, adverts or some magic beans? With out a clear path to profitability, MegaMod’s grand imaginative and prescient feels extra like a pipe dream than a stable marketing strategy. Traders are left with extra questions than solutions, and that’s a surefire technique to maintain the funding at bay.

The place’s your traction?!

PDT 100 1.9M Seed Megamod s10
[Slide 10] That is the closest the corporate has to a traction slide, however all I see are vainness metrics.
Picture Credit: MegaMod

MegaMod boasts having 2,500+ creators who’ve churned out a powerful 65,000+ video games. On the floor, these numbers appear promising, however on second look, they really feel intentionally opaque, as if the corporate is attempting to distract us with quantity somewhat than substance. If the common creator has made 26 video games (wow!), we have to ask some vital questions. Who’s enjoying these video games? Are they any good?

A lot of creations doesn’t imply a lot if the video games aren’t participating gamers or producing income. With out understanding the standard and recognition of those video games, it’s onerous to evaluate the precise influence MegaMod is having within the gaming neighborhood. I assume one of the best comparability I can give you is that this: The common three-year-old might be making 26 work per quarter. However their income goes to be incompatible with a venture-scale enterprise.

The following slide tasks an bold $170 million in ARR by 2028, which is nice, however there’s a evident omission: present income numbers. What’s the common income per participant proper now? How is MegaMod producing revenue now, and why are these particulars absent? It’s straightforward to make lofty projections, however traders must see a monitor file of development and present monetary well being to imagine in such an aggressive forecast. With out these key metrics, the projection feels extra like wishful considering than a practical marketing strategy.

One other purple flag is the supply of those customers. The Use of Funds slide (slide 13) claims “viral expansion and product-led growth” as the corporate’s development technique, however that’s about as obscure because it will get. What does that imply? The place are the customers presently coming from? How is MegaMod driving visitors and engagement? Phrases like “viral expansion” sound nice in principle however require concrete methods and proof of previous success to again them up. Actually viral firms are excessively uncommon. This lack of readability is irritating and does little to encourage confidence within the firm’s means to scale successfully.

Total, the traction slide lacks actual enterprise metrics, elevating critical issues in regards to the founders’ understanding of their enterprise. If I had been a board member, I’d be grilling them onerous on what metrics they monitor, why they suppose these are vital, and what particular actions they take to maneuver these metrics. With out clear, actionable information, it’s tough to gauge the true well being and potential of the corporate. Traders want transparency and precision, not smoke and mirrors.

Might the staff be any extra obscure?

I do know, I do know. I whine in regards to the staff slide in virtually each one among these pitch deck teardowns. And — this can be a promise, not a risk — I’ll maintain doing it till folks begin making higher staff slides.

The staff slide for MegaMod presents a bunch of people with promising descriptions, however the particulars are frustratingly obscure:

PDT 100 1.9M Seed Megamod s12
[Slide 12] I don’t actually know what’s occurring right here. I get the impression that the expertise is there, however this staff slide raises extra questions than it solutions.
Picture Credit: MegaMod

This slide is your golden alternative to name-drop the blockbuster video games you’ve labored on, the startups you’ve based, or the hyper-growth successes you’ve spearheaded. As an alternative, MegaMod affords murky statements that really feel extra like placeholders than concrete achievements. Particular firm names, numbers (revenues and outcomes) and information are vital right here. With out this, the descriptions come throughout as hole and unconvincing.

  • “Experience of building a $20m sales business.” Nice! Which one?
  • “Revenue up to $8 billion?” Holy cow, that’s spectacular. However for which enterprise?
  • “Experience of building a business for >80m users.” Sure! I wish to spend money on that! Present me the receipts!
  • “Launched 100+ mobile games.” Identify one! Perhaps two!
  • “Experience with 150M combined audience.” Cool. Which audiences? Who’re they?

The obscure claims virtually really feel like they’re attempting to cover one thing, like staff members have signed NDAs with their earlier employers and are skirting across the particulars. This type of opacity is a large purple flag and suggests one among three issues: a scarcity of serious accomplishments, a deliberate try to obfuscate the reality, or only a failure to determine what traders must know to make an funding.

The one logical conclusion is that this staff should be such epic rockstars that I’ll seem like a complete buffoon for not recognizing them. However critically, come on. If these obscure boasts had been true, turning this slide into an absolute slam dunk would have been a bit of cake.

The total pitch deck

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