A Guide to Funding for Developers with Finstock Capital

Great Northern Games Discord members joined an AMA with Game Republic affiliate member Edo Salvesen of Finstock Capital. The session covered the funding options open to UK studios in 2026 — grants, equity, tax credits and publisher deals — and what developers need to have in place before they approach anyone for money.

This free Discord chat formed part of Game Republic’s activities for 2026, supported by Official Partners Red Kite Games, Xsolla and Double Eleven and Strategic Partner Steel City Interactive

Here are the main points.

Why funding got harder

It is worth understanding the shape of the market before pitching into it, because the reasons funding is difficult right now also tell you what a funder is looking for.

During the pandemic the games industry attracted extraordinary levels of investment. On Crunchbase’s figures, venture funding into gaming-related startups peaked at roughly $12.5 billion in 2021, fell to around $2.5 billion in 2024, and reached only about $627 million in the first half of 2025. Higher interest rates made capital more expensive and investors more risk-averse, and the money that remains has moved towards later-stage, lower-risk bets.

Sector-level investment has since picked up: Drake Star recorded over $2.5 billion across 96 private financing rounds in Q2 2026, its strongest quarter by disclosed value in a year. But the headline rounds were in gaming AI, ad tech and hardware — AppsFlyer, General Intuition, Decart — rather than in studios making games. (The two sets of figures come from different datasets measuring slightly different things, so treat them as indicative of direction rather than a precise like-for-like comparison.) The point stands either way: for a studio raising money to make a game, conditions are tighter than the sector headlines suggest.

At the same time, competition for attention has intensified. Steam saw around 9,600 releases in 2020; in 2025 it was over 21,300, and 2026 is running ahead of that pace again. More games chasing the same finite pool of players makes any individual title a harder commercial case to underwrite.

“The market has changed. Discoverability means you can have some fantastic games that have not got the eyeballs that they’re expecting.” — Edo Salvesen

The practical consequence is that funders have shifted the burden of proof onto the developer. They want evidence, not intention.

Grants: the most accessible money in the market

With equity harder to raise, grants have become the most realistic first source of external funding for most UK indies — and there is more of it available than there was a year ago. On 13 April 2026 the government confirmed a £30 million package for the sector, including £28.5 million for the UK Games Fund, delivered through the Creative Industries Sector Plan.

The UK Games Fund now runs three tracks:

A few things to know before applying:

• All three fund labour, not everything else. Grants cover UK employee and contractor costs on the funded project. You are expected to carry the rest of the budget yourself.
• Match funding is real. The Prototype Fund grant can be no more than 50% of the remaining project budget. Content Fund applicants need total project costs of at least double the grant requested. Work out where the other half comes from before you apply.
• You need to exist first. Applicants must be UK-registered with active PAYE. The Starter and Prototype Funds also require you to have been registered with Companies House for at least ten weeks before applying.
• Rounds are short and heavily oversubscribed. The UK Games Fund has taken more than 1,500 applications and funded over 400 projects since 2015. Watch for openings and be ready to move — the 2026 Starter Fund took applications in May and is already closed, with selection running through June and July.

Beyond the UK Games Fund, Innovate UK funds games and immersive projects with a genuine technical innovation angle, and its Immersive Tech Network is a useful place to track live calls. The BFI is worth knowing about for a different reason — see the tax credit section below.

“All of these areas are becoming more challenging and that’s where the grant situation becomes an important factor, because it can provide money to get to the next stage.” — Edo Salvesen

The strongest applications meet every stated criterion explicitly and provide more information than the form strictly demands. Assessors are reading a lot of applications; make yours easy to say yes to.

The tax credit: it is now VGEC, not VGTR

This is the single most common point of confusion, and it matters because a payable credit is money coming back to your business rather than money you have to persuade someone to give you.

Video Games Tax Relief (VGTR) is closing. The test is the production phase, not spend: you cannot claim VGTR for any game that entered the production phase after 31 March 2025. For games that got in under that line, VGTR covers expenditure incurred up to 31 March 2027, and the scheme closes for all productions from 1 April 2027. Everything else goes through the Video Games Expenditure Credit (VGEC).

VGEC is worth 34% of qualifying expenditure, and because the credit is itself taxable at the 25% main rate of corporation tax, the net benefit is 25.5% of qualifying expenditure. Note that “qualifying expenditure” is the figure after the cap below, not your total budget: a studio with £1 million of UK core costs has £800,000 of qualifying expenditure, giving a £272,000 credit and roughly £204,000 net.

The differences from VGTR are worth knowing:

• Qualifying expenditure is the lower of 80% of total core costs, or your UK core costs. Even an entirely UK team cannot claim on 100%.
• Costs must be used or consumed in the UK — VGEC dropped the old EEA basis.
• At least 10% of core costs must be UK spend to qualify at all.
• The old £1 million subcontracting cap has been removed, which is a meaningful improvement for studios that outsource.
• Connected-party costs are now allowed on an arm’s length basis.

To claim, the game needs a BFI cultural test certificate. The test scores out of 31 points across cultural content (16), cultural practitioners (8), cultural contribution (4) and cultural hubs (3), and you need 16 points to pass. Crucially, you can apply for an interim certificate at any point before or during development, which lets you claim VGEC while still in production rather than waiting until release.

“VGTR is an important area for games companies. It is crucial that you get that relief, because it’s a payable back to you as a business.” — Edo Salvesen

VGEC is also the basis of a lending market: several lenders, Finstock among them, will advance against a future credit to bring that cash forward into development.

Equity: keep as much of it as you can

Equity was the recurring theme of the session. It determines who owns the company, who benefits from its success, and how much room you have to raise again later.

“The best thing you can do is retain as much equity as possible, because you’re backing yourself. The value you get in your profit is dependent on how much equity of the business you have.” — Edo Salvesen

That does not mean avoiding investment. It means being deliberate about sequencing: use grants and tax credits to build value first, so that when you do sell equity, you sell less of it for the same money.

Where you do raise, SEIS and EIS are the mechanism that makes UK early-stage investment work, because they transfer much of the downside risk from the investor to HMRC.

SEIS — for the earliest stage:

• Company can raise up to £250,000 in total across its lifetime
• Gross assets under £350,000, fewer than 25 employees, and the qualifying trade carried on for no more than 3 years (note this is a trading-age test — first commercial sale is the EIS test, not the SEIS one)
• Investors get 50% income tax relief, up to £200,000 invested per tax year

EIS — and the limits doubled this year:

• From 6 April 2026, the annual company limit rose from £5 million to £10 million, and the lifetime limit from £12 million to £24 million (£20 million and £40 million for knowledge-intensive companies)
• The gross assets test rose to £30 million pre-investment and £35 million post-investment
• Fewer than 250 employees and within 7 years of first commercial sale (500 employees and 10 years for knowledge-intensive companies)
• Investors get 30% income tax relief, up to £1 million per tax year (£2 million where at least £1 million goes into knowledge-intensive companies)
• The scheme is legislated through to April 2035 (the increased limits do not apply to a narrow class of “specified companies”, which will not affect games studios)

Shares must be held for at least three years, gains are free of CGT, and loss relief is available if the company fails. Get the order right: you cannot use SEIS once you have taken EIS or VCT money, so SEIS shares must be issued first.

One practical warning on Advance Assurance. HMRC will not process speculative applications. Its guidance is explicit that a company “must have engaged with individuals or business promoters who have agreed their investment plans are viable,” and for direct raises HMRC expects names, addresses and amounts for prospective investors. Naming one or two minor investors is not enough. If you are raising through a fund, promoter or crowdfunding platform, you must disclose that — failure to do so invalidates any assurance given. HMRC publishes no service standard for advance assurance and turnaround varies widely, so allow a couple of months and do not let it sit on the critical path of a raise.

Prove there is an audience

Every route above — grant, equity, publisher, crowdfunding — now asks the same underlying question: is there evidence that players want this?

“We need to see those engagement levels to show that there is real demand here for that project. How are you building up an audience? How are people finding it? Are you sharing images of the game? Because that can fill the momentum and get funding.” — Edo Salvesen

Evidence can take many forms, and no single metric is decisive:

• Steam wishlists, with velocity mattering as much as the total. As a rough calibration, appearing on Steam’s Popular Upcoming list — a significant visibility event at launch — generally takes somewhere in the region of 7,000–12,000 wishlists, and it is competitive rather than a fixed threshold.
• Social engagement that is growing, and where the engagement rate holds up as the audience grows
• Event reactions — queue lengths, repeat players, what people say unprompted
• Demo and playtest data, particularly retention and completion rates
• Community depth — an active Discord tells a funder more than a large but passive follower count

Feedback matters as much as the raw numbers. Showing that you have gathered player feedback and visibly changed the game in response demonstrates something investors care about: that the team can read a signal and act on it. Studios that ship what players actually want tend to be the ones that survive long enough to matter.

Getting investment-ready: the checklist

The order here matters, because each step unlocks the next.

1. Incorporate a limited company. Nothing else works without it — no grant applications, no equity raise, no VGEC claim.
2. Register for PAYE and get past the ten-week Companies House threshold that the UK Games Fund requires.
3. Build a playable vertical slice. Concepts and pitch decks alone are no longer enough. A slice that demonstrates the core loop at final quality is the asset that unlocks both grants and publisher conversations.
4. Apply for a BFI interim certificate so you can claim VGEC during development rather than after release.
5. Get SEIS/EIS Advance Assurance — but only once you have real, nameable prospective investors.
6. Build the pitch deck around evidence. What the game is, the slice, audience proof, exactly what the money will be spent on, and what it buys — a milestone, not a vague runway extension.
7. Start building an audience now, not when the game is nearly done. Wishlist velocity and community growth take months to establish and cannot be manufactured late.
8. Have a plan for who you approach and in what order. A scattergun approach to publishers and investors burns relationships you may need later.

Final takeaways

The market has not run out of money — it has run out of patience for uncertainty. Whether you are pursuing grants, publishers, equity or crowdfunding, the funder is trying to eliminate risk, and your job is to remove it for them before they ask.

That means demonstrable audience demand rather than a projection. A playable slice rather than a concept. VGEC and grants used as a foundation so you are negotiating from strength rather than desperation. And as much equity retained as you can manage, because you are the one backing yourself.

In the most competitive market the industry has seen, the studios getting funded are the ones that arrive with the answers already prepared.

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Edo Salvesen is a co-founder of Finstock Capital, which provides funding and advisory support to studios across the UK games industry, including VGEC and VGTR advance lending.

Figures correct as at August 2026. Grant rounds, scheme limits and thresholds change — check the relevant official source before relying on any of the above.

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