First an apology: Inevitably this diary has become a lot less frequent than I would like! The sheer amount of work of involved in launching a Kickstarter, as day 3 explored, is vast. And, much as I would like to blog more, its absolutely not the most pressing task in long list. It doesn’t compete, for example, with officially announcing on our launch on the 21st and putting up a shiny new site! No promises, but let’s hope I have more time to share thoughts because SO MUCH IS HAPPENING. Anyway…on with the main event!
Those of you know me well will be pretty sure I did not grow-up among the majestic mountains of the ‘cowboy state’. Those of you who do not know me well yet would confidently take that bet.
Well, from a few weeks ago, Wyoming suddenly became more important to me, Naylor Games and the Magnate Kickstarter with the formation of a new US entity called NaylorGames LLC.
Why have you set-up Naylor Games LLC?
Some of you may have heard that the UK has some very minor kerfuffle at the moment with something called Brexit. If you want to know more about that, feel free to read that wiki page (it’s actually pretty good!) or better yet don’t because it’s frankly a bit of a mess.
One way its a bit of a mess that matters here is that its causing the pound to fluctuate quite a bit. While fears of a highly disruptive no-deal Brexit have subsided a bit now, nothing in the process is certain. Crucially, nine weeks ago when I needed to start making a decision about what to do about it, it looked a lot more immediately uncertain than it does today. That uncertainty can quickly turn into a huge problem for people manufacturing things like me. Because if the pound suddenly drops in value against the dollar, my costs – which are billed in dollars – go way up even if the product has not changed at all. For a game like Magnate where I am trying to bring in a lot of quality components at a really good price, that’s a big problem. It could mean (if the drop is real bad) the difference between a successful or unsuccessful project.
Lots of creators have faced this recently and dealt with it in different ways (although you are unlikely to have heard about it). Massively sandbagging your budget is one way. But that generally means compromising either price or quality. Another way is to just hope for the best. That’s not my style and, again, in Magnate’s case just too much of a risk.
The way I’ve picked is to set-up a US company to manage the process. So the Kickstarter will run in the US, rather than the UK, and be raised in dollars. This means if the worst happens, UK backers would be subjected to an effective price hike – which is really crap – but the overall project is still looking strong for a nicely delivered product. If the pound magically goes back to pre June 2016 levels, UK backers clean-up, no one else gets hit and the finances still look good. The only loser there is me paying back sunk costs over time. That is fine by me though, because I still get to make Magnate. Lastly, if things are stable, then everything remains the same as previous.
Having a properly registered US entity, could useful for Naylor Games’ expansion anyway in the future if we choose to take it further. But what matters now is that after spending a lot of time researching it and securing legal and financial opinions, it turns out for me that this legal structure and location was the overall best for us for now.
In general creators are loathed to talk about this stuff because they fear the potential negative publicity around it or raising thorny commercial and legal questions. That’s understandable and logical and totally sensible – it is no critique of them and it requires a fair bit of research to be sure what you are saying and doing is correct. But as you will know if you’ve read this blog before, you know that I love transparency of process. The way I see it is this: if you’re going to trust me with your money as a backer, I sure as hell need to earn that trust. One way to earn that trust by being as transparent with you as I can so you know what’s going on.
Setting up a US company is not one of your holiday games
The path I’ve taken looks to me like the most complete answer to the problem. But the work involved is very, very substantial. A big chunk (though by no means most!) of that admin I complained about last time has been flowing from this. From picking a state, to picking a type of entity, from forming a new company which is owned by a UK company to applying for a US bank account, there is a huge amount involved.
Every state has different laws, reporting requirements and tax systems and, above them all, federal law has its own requirements. Even simple forms require notaries to confirm your identity – in person – that are simply submitted for processing in the UK. Until recently it was very hard to even open a bank account without physically travelling there to sign the necessary forms. After going through this process it’s no surprise to me that, despite its reputation for massive international technical innovation, the US actually ranks quite poorly in terms of red tape; worse than “socialist” Finland. But now its done, I have to say, it’s pretty cool being able to say I have a properly registered US company!
Why am I a glutton for this admin punishment? I think its worth for it for the project and actually, I found this quite interesting compared to the other admin I have done. The challenge of tackling a new system! Knowing how to spin-up a multinational firm (which is what Naylor Games now is, madly enough) is some pretty useful knowledge to have in business.
Luckily, I am not alone in this. US Tabletop miniatures man and all round trooper Dave Taylor is helping me out with the campaign. Dave is not an employee of Naylor Games (we don’t have any yet!) but is working on the campaign with me, providing advice and specific administrative assistance to make sure all the boxes are ticked and we end the process with a well fulfilled project! Because Dave is helping out, you’ll see his name on our Kickstarter page alongside mine and naturally, Naylor Games.
Dave works over the tabletop industry in different roles, but most recently has launched his own terrain creation manual, which raised a whopping $269,000! You can see why I’d want his help. Luckily for me, he is not only highly competent, but a lovely chap to boot.