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Humble Bundle Investment

This SEC Filing shows that The Humble Bundle has received a $4.7 million investment, which Gamasutra says a "reliable source" informs them is led by venture capitalists Sequoia Capital, and that they not yet received a response from Humble Bundle cofounder (and COO of Wolfire Games) John Graham to their inquiry about what they will do with this cash. The Humble Bundle is currently amid their third offering of a bundle of DRM-free indie games with a pick-your-own-price payment scheme and a charitable component.

7. Re: Humble Bundle Investment Apr 24, 2011, 07:35 DG
Strange. It's new capital, not selling out. $4.7m is a lot of dough when they're already up and running, and supposedly the donations towards the company were implied to cover costs i.e. non-profit. I have some difficulty imagining they make the kind of money to interest $4.7m.

I dunno about Sequoia specifically but "led by" is likely significant wording. Often, scrape away the paperwork and fundamentally there's a syndicate of independent investors managed by the VC. It's not impossible some of the investors are charities. Though risky investments are generally not appropriate use of charitable funds, there may be an arrangement here making it not so risky, for example there may be say a dozen charities and a dozen indie devs all putting money into a pot they already have significant interest in, making it more like a joint-venture. In that scenario Humble Bundle itself could continue to break-even while the fruits of the investment come directly through greater donations & sales of games.

Having gone with wholly equity rather than loans implies longer-term intentions. Commercial VC's tend to like going loan-heavy because firstly loans are further up the pecking order (they get more cents in the dollar back if it collapses), secondly loans can be drawn down rather than have to take dividends which get taxed somewhere, thirdly loans can be drawn down while equity is difficult to reduce (you might have to sell it). It's also compatible with the joint-venture possibility because equity more or less forces commitment, their money is stuck there.

This comment was edited on Apr 24, 2011, 07:42.
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>> 7. Apr 24, 07:35  Re: Humble Bundle Investment DG


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