Cutting Edge Gamer – Advancing Gaming and Raising Capital, all in a Day’s Work
Every Fall and Spring Semester TVL scours Austin, TX searching for top pre- and post revenue startups seeking to make an impact in a variety of verticals and those with emerging technologies suited for growth. In Spring 2017, as the sustained rise in the gaming industry continued to show proof that it was not stopping, Cutting Edge Gamer (CEG) joined the Texas Venture Labs (TVL) Accelerator program.
The TVL Accelerator matches Austin-area startups with cross-functional teams of UT Austin graduate students for 10-week long startup consulting projects. Our rigorous market validation process and our students’ research accelerates startups towards funding. At the end of the semester, each Accelerator company is offered an opportunity to present to Austin’s investor community at our capstone Venture Expo event.
Each startup that is accepted into the TVL Accelerator is in a unique and important phase of their business lifecycle as they seek to raise funding within the next 18 months. In the world of Elite Gaming, CEG offers a membership service providing an ‘experience of today’s best graphics technology at a fraction of the cost’. Hardcore PC Gamers often spend $1000 or more for the latest and best graphics cards. Why do gamers want the best graphics cards money can buy? The answer: to have the best, be more competitive, and enable the latest GPU features like 4K Gaming and HD VR Gaming. [CNET]
Every founder will tell you that analyzing your financing strategy and raising capital is one of the key components to building a company that sustains its profits and doesn’t burn out before it has a chance to capture market share. TVL sat down with Cutting Edge Gamer’s Founder and President, James Walsh, to give us insight into his journey through the TVL Accelerator and how Cutting Edge Gamer is ‘well on their way to reaching seven figures in annual revenues for the first time ever – quite an accomplishment for us!’
Spring into action! Apply now for TVL’s Accelerator Cohort!
Fireside chat with James Walsh, Cutting Edge Gamer Founder and President
What was Cutting Edge Gamer’s experience in the TVL Accelerator?
It was a great opportunity to be in the Spring 2017 cohort of the TVL Accelerator program. The six grad students I was paired up with were excellent, and they produced some great work regarding two questions we had: 1) identifying new sources of funding, especially from equipment financing firms; and 2) valuating the company. I met with my team every few weeks, and they were all self-motivated: we basically set the scope of each project early on and then let them run with it.
How would you describe your experience leading up to and at the Venture Expo?
As the team was working on the two projects, I could really see the results coming together as we neared the Venture Expo event. The team even went beyond identifying new sources of funding and even called on CEG’s behalf to “warm” up the lenders and filter ones out. The valuation, taken from a couple of different methods, was extremely beneficial for our Venture Expo presentation, as we could state with support our company’s valuation. The Venture Expo was an excellent event, able to showcase what we are doing at CEG, our success to-date and our current investment opportunity. I met quite a few investors and crowdfunding reps after the presentation, and I have connected with some of them since.
What surprised you most about the experience?
The quality of work from the team and the level of engagement I had with them over such a short period of time was quite a surprise. The team also went above and beyond my expectations, such as pre-filtering the list of equipment financing firms and going after the valuation using several different methods, which really showed their sense of doing their best to help CEG succeed.
What feedback did you receive that helped you most going forward in your funding conversations?
Receiving a pre-filtered list of equipment financing companies has reduced my time immensely in trying to identify firms willing to do work with my company’s type of business model: leasing graphics cards to PC gamers. The valuation has also been key in conversations we have with potential investors and in narrowing our scope as to which type of investor we target for our promissory note program.
Where are you now in raising?
At the time of the Venture Expo, we had closed on $310K in capital. We are now at $820K in new capital for the year – over $500K since May! Our goal for 2017 is to close on $1M in new capital so we are close to achieving our goal.
How were you able to obtain and leverage the $500K funding and how has this supported your fundraising strategy?
$310K came from individual investors who invested through our secured promissory note program, and $210K came via notes from equipment financing firms, so it is a good mix.
What other connections did you make through TVL and the whole process?
We have made connections with crowdfunding companies, ecommerce development / social media firms, and another TVL Accelerator alumnus company – SocialMatters – who has helped us use the power of LinkedIn to expand our investor network.
Where are you at now and what does the future hold for Cutting Edge Gamer?
We are well on our way to reaching seven figures in annual revenues for the first time ever – quite an accomplishment for us! Our new website will allow us to sell PC gaming components to our customers – expanding our product lineup from just solely leasing graphics cards – will be launched very soon. And next year we are looking to raise $1.6MM in new capital and growing Cutting Edge Gamer even more!
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TVL couldn’t help but capture a few company website reviews that sum up the core of CEG’s business and what it means to its customers:
“It’s not at all about the price. This is just “Smart Business Sense”. Leasing from CEG for my business preserves capital and provides flexibility. I have top notch customer service, warranty, unlimited upgrades, and expedited RMA. From here on out it’s Cutting Edge Gamer for my business graphics needs!” Cheshier, Bozeman, MT
“Really an awesome service. I’d been stuck on hobby cards like a GTX 760 to a GTX 1060, then I IMMEDIATELY jumped on this wagon for an MSI GTX 1080 GAMING X and am happily gaming at 4K now. The shipping was fast. From ordering and signing, I had the card in my rig in three days. Card was in mint condition, immaculate really, and has been running nonstop like a champ. It’s so much easier for me to pay monthly any way. I’m SO glad this company exists for us gamers. Only thing is, I’m probably going to have to upgrade to the GTX 1080 Ti now! ;)” Thomason, Denver, CO
“Finally a way to have top of the line cards without spending a grand all at once. Very good support, and an actual company that puts the customer first!” Blewer, Chattanooga, TN