Adventure Capitalist

  

Categories: Investing, Tech

For those who want to avoid any risk from investing in the real world, AdVenture Capitalist might be the answer.

An online game, players pretend to be major investors in various products to generate large amounts of cash. Starting out with just a single lemonade stand, there are three areas where you can invest: the Earth, Moon, and Mars. Once you increase your revenue at the lemonade stand, you can buy more stands, and gradually work your way up to $1 trillion on Earth. From there, you can invest on the Moon or Mars. A player can speed things up using advertisements, angel investors, or buying gold or megabucks with real money.

The game did not get great reviews, but still maintains a loyal following.

Related or Semi-related Video

Finance: How Do You Get Your Startup Fun...96 Views

00:00

Finance a la Shmoop. How do you get your startup funded? If you're leaning is in

00:08

this direction, well then first you pray. Can't hurt right? Okay well maybe it can,[two men in church]

00:13

shocking. Well the world of startups is really a tale of two cities or types of

00:18

business. There's tech startups and then there are

00:21

non tech startups. The former is lavishly funded with tremendous resources and

00:27

huge valuations. Which means that the capital invested is almost free for the

00:31

founders and there are literally thousands of companies around the world

00:35

who invest in early technology startups.[Global map with business buildings] But if you're trying to fund a

00:39

restaurant, a bar, flower-arranging chain, a bug spraying service and auto service

00:45

business. Well then you're probably badly out of luck. If you do get financing,

00:50

it'll be on vastly worse terms than if you would have invented a new robot operating

00:55

system that could see in the dark, or an electronic zit zapper, or a drug that

00:59

made you happy you knew it and you didn't even have to clap your hands. [T-Rex clapping hands]

01:03

Since the restaurant industry for example is such a bad investment with

01:08

some 95% plus of them going bankrupt in the first few years.

01:12

Very few investors are willing to take any risk investing in them. As a result

01:17

if you want to fund that kind of business, well you most likely have to

01:21

fund it yourself by saving your pennies, waiting for old uncle Larry to kick the

01:25

bucket and leave you money and/or mortgage whatever you can of your house [man at Chase Bank]

01:29

at the bank. Knowing that if your restaurant goes belly-up, you rethink

01:33

your five-year-old SUV in terms of living room, kitchen here and bathroom

01:39

there. Well if you do have the knack for tech, well and you come up with the lawn

01:43

Roomba which will make mowing the lawn a breeze. Then the process usually begins

01:47

with a business plan. You'll leverage Google slides, a free presentation tool,

01:51

where you can have one page describing your product, a page covering the size of[business slides]

01:55

the market, ie the number of potential buyers, anyone with a backyard basically,

01:59

along with the price you'd expect them to pay. Another page covering the costs

02:03

of making the first one, the first hundred, the first thousand, the first

02:07

hundred thousand units. Were presumably the marginal cost per unit

02:11

down with scale production and finally you have a page or three showing, what it

02:15

is you've done that's hard to do. IE you have patents protecting your idea, [board meeting presentation]

02:20

which you've already filed and it's not some idea that people at Google, with its

02:25

engineer army could likely read your slides as you build them and just copy

02:30

what you've done and do it themselves. Well you figure out how much money you

02:34

need to get a couple of years down the road. This point where you're pushing

02:37

product out the door and well say you asked for three million dollars from[cost pie chart]

02:41

investors who would then own maybe a third or more of the company day one.

02:44

You're valuing then your idea, your time, your brain, your patents, all combined for

02:49

I'll say six million dollars already then you're asking investors to pile

02:53

three million dollars in cash on top of that six million. So that the combined

02:57

company of your ideas and you, are now worth a total of nine million bucks.

03:03

You'll also want to make talented hires to whom you can't afford to only pay[business woman shaking hands]

03:07

cash. So you'll allocate a bunch of shares or

03:10

options on shares to be granted to those new highly talented employees as well.

03:15

Maybe those options or shares are worth another million boxes, as you add everything

03:18

up. Such that your total company now has a notional combined value with

03:23

everything of ten million bucks and that's when the Trojan hit the road [man driving red car]

03:28

and you see if you actually can build this thing. Mow little Roomba mow.

Up Next

Finance: What is Venture Capital?
755 Views

What is venture capital? Venture capital is the money that companies use to start conducting business. Usually startups will go out and raise ventu...

Finance: What are Five Questions You Can Expect to be Asked in a Venture Capital Investing Interview?
10 Views

What are Five Questions You Can Expect to be Asked in a Venture Capital Investing Interview? Why are you doing this? What DO you know? What do you...

Finance: What are Angel Investors and Seed Funds?
8 Views

What are Angel Investors and Seed Funds? Angel investors provide the funds for small start-ups. They are usually family and friends (not institutio...

Finance: What is an IPO?
25 Views

What is an IPO? IPO stands for initial public offering. These are used when a company decides to go public; meaning people can buy shares of the co...

Find other enlightening terms in Shmoop Finance Genius Bar(f)