Great Republic members joined a funding masterclass webinar with Game Republic affiliate member Edo Salvesen of Finstock Capital and Andrew McMillan and Grant Snedden of Johnston Carmichael. The session covered the funding options open to a UK studio, and how to layer them into a sustainable capital stack.
This webinar 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
Funding Has Changed
It is worth understanding the landscape of the current funding market before pitching into it, because the reasons funding is difficult right now also tell you what funders are looking for.
It used to be that a strong pitch deck, an indie developer’s track record in the games industry were enough to get a game studio funded adequately. As Grant Snedden made clear during the talk, that is no longer the case.
Competition for players has risen and visibility for indie developers has fallen. Investors have become more selective as a result, and a developer seeking funding in the early stages of development now has to provide compelling evidence for why their game should be the one backed.
It was highlighted that funders need more proof of demand and public interest in the game, such as a playable demo, a large number of wishlists and active Discord communities interested in the game. These factors can make a game more appealing to potential investors by reducing the risk an investor takes on. The main message was to rethink how a raise is put together, rather than relying on a single strength of the game to carry it. Funders want evidence, not just intention and promises.
“In 2026, we are actually beginning to see some growth again in games. But companies who are investing in games companies are getting pickier. They’re becoming far choosier and they need to see certain points.” Edo Salvesen, Finstock Capital
Setting a Financial Foundation
A key theme of the session was the need for a funding plan, and a firm financial base to build on as development progresses. Before any investor, lender or publisher looks at a pitch, they test the numbers behind it. In practice that means monthly management accounts rather than a year end scramble, a forecast with assumptions the studio can defend, and a clear view of burn rate and runway. A studio that cannot produce those quickly loses both credibility and negotiating time.
“In my experience, it’s the studios that raise money quickly that aren’t always the ones with the kind of best game idea. They’re often the ones whose financial foundations and assumptions are well set and those foundations and assumptions stand up to funder scrutiny. No fund is going to move faster than your management information and financials.” Andrew McMillan, Johnston Carmichael
Grants Come First
Grants can form the base of a successful funding stack for an indie studio. Once awarded they cost nothing: no equity changes hands and no interest accrues. They were highlighted as one of the best options for a studio starting out, precisely because nothing has to be repaid.
The trade off is process. Grants are highly competitive, application windows open only at certain points in the year, and they often close early once capacity is reached. Keeping track of when those windows open is a job in itself, and the application process is slow.
An example that was brought up was the UK Games Fund, now a package of around £30m split across three tracks: up to £20k for the newest studios, up to £100k towards a playable prototype, and up to £250k for established studios that already have third party investment in place. It is heavily oversubscribed. Edo highlighted that the indie studios that succeed generally target grants that would be most beneficial to their current business model and game development process. Doing the research pays. Know what the money is for and what happens once it runs out, check whether match funding is required before you apply, and put real effort into a small number of well chosen applications rather than spreading thinly across every scheme on the market.
“Grants are free at the point of use. It’s a very competitive process to win grants and they’re quite slow to apply for, but it is a really important foundation for a business.” Edo Salvesen, Finstock Capital
Tax Credits Come Next
The next layer up is money a studio has already earned by spending in the UK. The Video Games Expenditure Credit has replaced Video Games Tax Relief, and has been mandatory for new productions since 1 April 2025. VGTR closes entirely on 1 April 2027, so any title still claiming under the old regime needs a plan to move across.
The headline VGEC rate of 34 per cent applies to 80 per cent of qualifying UK core spend, and because the credit is itself taxable the net benefit lands at roughly 20p in every pound of core expenditure. That is a modest improvement on the old regime rather than the step change the headline rate implies, so it is worth modelling properly rather than assuming a third more cash.
R&D tax relief still applies to genuinely technical work such as engine, tooling and platform development, but it cannot be claimed on the same expenditure as VGEC. Deciding in advance which costs sit where, rather than reconciling it after the year end, is what protects the value of both.
Debt Bridges the Gaps
Between the money a studio has earned and the equity it would rather not sell sits debt, the layer most often overlooked. Its job is timing. HMRC pays a VGEC claim months after the year end, publishers pay on milestones, and launch revenue arrives only after the marketing budget has been spent. A loan closes those gaps for the cost of interest, and nothing else changes: no shares are issued, no board seat is given up, and the studio keeps all of the upside if the game succeeds.
Common uses include advancing a VGEC claim so the cash arrives in about a week rather than six to nine months, funding production against signed publisher payments or historical revenue, and covering the match funding a grant application requires. It also underpins self publishing, where borrowing against expected revenue to fund a studio’s own marketing will often cost far less over the life of a title than handing a publisher 30 to 50 per cent of revenue permanently.
Retaining Equity As a Business
Equity was a 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.
Equity is at the top of a sustainable funding stack because it is a share of your business that in practice you never get back. There is no interest rate, no cap and no repayment scheme. It is the most expensive money in the stack, because it is the only money a studio never repays. Panellists advised keeping as much equity as possible, releasing it only when the timing is right and only in the smallest amount that does the job.
Equity should not be the main route to funding an entire development. Grants, tax credits and debt all sit below it in the stack and should be worked through first, because none of them costs a permanent share of the business. By not giving away equity, you own your company and therefore can retain its profits if a game becomes successful.
“Equity is the most expensive part of the money because you’re giving away a share of your business. And you can never pay that back. It’s a share of your business forever. It’s not capped and it’s long-term capital. Really important, you don’t want to give away too much too early.” Edo Salvesen, Finstock Capital
Final Takeaways
- The core message of this masterclass is that funding is a stack. It means combining multiple sources rather than relying on a single bet.
- The indie studios that succeed don’t give away too much equity and retain as much of it as possible, only giving small quantities away at the most opportune time.
- Any studio that strives to be successful must also lay stable foundations to build the business on. That means keeping accurate management accounts and having your IP and funding plans and budgets documented as early as possible.
- When applying for grants, research is essential. Targeting a few grants that match your business plan is likely to be more successful than applying to every grant on the market.
- It is important to understand the reliefs you’re entitled to, such as VGEC and SEIS/EIS.
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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