Moritz Baier-Lentz is a Partner and Head of Gaming at Lightspeed Gaming, a company that partners with extraordinary founders in the gaming sector. In this position, Moritz has spearheaded investments in groundbreaking ventures, including Fortnite and League of Legends creators. With extensive experience at BITKRAFT and Goldman Sachs, he has advised on over $300 billion in transactions. As a former Diablo II global #1 player, Moritz holds an MBA and MA from Stanford. He is also recognized as a leader by Forbes and the World Economic Forum. Passionate about athletics and philanthropy, he raises funds for depression research through ultramarathons, having amassed over $250,000.

Here’s a glimpse of what you’ll learn: 

• How Moritz Baier-Lentz got established in the gaming industry
• Moritz explains how Lightspeed and BITKRAFT differ
• When to do studio investing versus games investing
• What is the advantage of companies becoming generational?
• The top mistakes to avoid in early-stage pitches
• Creative versus technical: how should you structure your startup for funding?
• How do IPOs compare to M&A as an exit strategy?
• Moritz shares how he handles imposter syndrome

In this episode…

Success in the gaming industry often hinges on a blend of innovation, market insight, and strategic decision-making. Staying attuned to emerging trends and fostering a culture of collaboration and continuous learning can position startups for long-term success and attract investments. How can aspiring entrepreneurs harness their creativity and industry knowledge to carve out their path to success in this dynamic landscape? 

Gaming enthusiast Moritz Baier-Lentz exemplifies the power of forging a path through a blend of vision and adaptability. As Moritz explains Lightspeed and BITKRAFT’s approach to evaluating investment opportunities in the gaming industry, it becomes evident that staying ahead requires not just recognizing trends but also knowing how to leverage them effectively. Moritz dissects the elements of a winning pitch for gaming startups, how venture capitalists identify promising game studios, and how to structure your business for funding. This strategic foresight, coupled with an understanding of the advantages of companies becoming generational, presents a compelling narrative of sustained success. To thrive in the gaming industry, embrace innovation, stay adaptable, and continuously seek growth opportunities.

Join Lizzie Mintus on today’s episode of the Here’s Waldo podcast as she interviews Moritz Baier-Lentz, Partner and Head of Gaming at Lightspeed Gaming, about attracting investors for your gaming studio. Moritz discusses how he got established in gaming, the advantages of generational companies, industry deals and exit strategies, and what it takes to create an effective pitch.

Resources Mentioned in this episode

• Here’s Waldo Recruiting
• Lizzie Mintus on LinkedIn
• Moritz Baier-Lentz on LinkedIn
• Lightspeed
• Lightspeed Gaming
• BITKRAFT

Sponsor for this episode...

This episode is brought to you by Here’s Waldo Recruiting, a boutique recruitment firm specializing in the video game industry that prioritizes quality over quantity and values transparency, communication, and diversity. We partner with companies, creatives, and programmers to understand the why behind their needs and provide a white-glove experience that ensures a win-win outcome.

The industry evolves. The market changes. But at Here’s Waldo Recruiting, our commitment to happy candidates and clients does not. 

We understand that searching for the best and brightest talent can be overwhelming, so let our customer-first staff of professionals do the leg work for you by heading over to hereswaldorecruiting.com.

Episode Transcript

Welcome to the Here's Waldo Podcast, where we sit down with top visionaries and creatives in the video game industry. Together we'll unravel their journeys and learn more about the path they're forging ahead. Now, let's get started with the show.

Lizzie Mintus: I'm Lizzie Mintus, founder and CEO of Here's Waldo Recruiting, a boutique video game recruitment firm. This is the Here's Waldo Podcast. In every episode, we dive deep into conversations with creatives, founders, and executives about what it takes to be successful. You can expect to hear valuable lessons from their journey and get a glimpse into the future of the industry.

This episode is brought to you by Here's Waldo Recruiting, a boutique recruitment firm for the game industry. We value quality over quantity, transparency, communication, and diversity. We partner with companies, creatives, and programmers to understand the why behind their needs. Today we have Moritz Baier-Lentz with us.

Moritz is a partner and the head of gaming at Lightspeed, a global leading venture capital firm with 13 offices, more than 29 billion in assets under management, and over 500 investments and 200 exits across the U. S., Europe, and Asia. Moritz loves to partner with exceptional entrepreneurs and has served as an investor, board member, and advisor to founders who led the creation of games like Fortnite, Call of Duty, League of Legends, Wild Rift, Apex Legends, Overwatch, Sky, Valorant, Starcraft 2, and Warcraft 2.

Let's get started. Thank you for being on the show today and making time.

Moritz Baier-Lentz: Thank you. Thanks for having me.

Lizzie Mintus: I'd love to start by hearing more about your background. Can you talk about what led up to you being a partner at Lightspeed?

Moritz Baier-Lentz: Yeah, I'll keep it brief just so we have many other things to talk about too. My first foray into gaming started as a player about 20 years ago. I grew up to not too much of a parental expectation. My parents had both dropped out of high school. My brother had dropped out of high school, my bar was relatively low, which was staying in high school, and I thought that was possible while also playing a lot of video games. I fell in love with Diablo 2, peaked out at global number one twice in 2003 and four in hardcore and softcore. I used money from those in game item sales during that time to fund my education, undergrad in Germany and then graduate school in the US.

By the time I graduated, I did not really think of gaming as a viable career and I was very much on a credentialing track, and attracted by all the great brands and industries that you have access to after attending business school. And I ended up joining Goldman in the investment banking division, focused on tech. Initially did that for two years and then in 2016, a little bit into that job, somewhat naturally came back to gaming and ended up starting Goldman's gaming practice and leading that for about four years. I did not want to grow old as a banker. And so in 2020, I decided to make the jump to gaming, specific venture capital.

So last eight years for me basically have been at this. Somewhat weird, but certainly growing intersection of gaming and finance. And yeah, joined Bitcraft when they were early into the fund, scaled it with the management team to, I think, just shy of a billion dollars right now.

And amazing time, learned a lot during those three years. Very proud of the investments and also what we built there together. And then, have been working with Lightspeed a little over a year now. I wasn't planning to leave Bitcraft frankly, but the opportunity to work with my now partners here and join a firm that's been investing for over two decades, not just gaming, obviously, but enterprise consumer healthcare, fintech, blockchain infrastructure, and to build out gaming interactive media for Lightspeed. It was an opportunity that was a bit too good to pass. Really enjoyed the move so far and my time here.

Lizzie Mintus: Look forward to seeing what you do next. Can you share a little bit more about Lightspeed as a whole, and then the gaming and interactive media practice specifically that you lead?

Moritz Baier-Lentz: Yeah. As you mentioned in the beginning, we're looking at about 30 billion in assets right now. A lot of the firms of our size are actually not truly global. So I think that's one thing that's unique about Lightspeed is we do actually have offices across the U S but also across Europe. We have partners on the ground in Israel, in India, in China. And so that's one choice.

The other thing that stands out again, also for firms of our size is that all partners collectively invest from the same fund. There's no gaming fund, just like there's no enterprise fund. There's also no geographic funds. We do split the funds by stage. So there's early stage versus growth stage, because typically for LPs, they have a certain risk profile and preference. So we cater to that. But other than that, we hold everything we find account globally and across sectors to the same firm standard for investment. It also means we're sharing the same carry pool. So we're all incentivized, even if it's a company outside of our immediate focus or interest or whether it's one we invested in personally or not to help and support.

Especially in 2024, it feels like a lot of interesting stuff's probably going to be built at the intersection of traditional boundaries, sectors or geographies, in what is probably a platform shift with generative AI. I really liked a setup. It also creates, I think, the right incentives internally to be externally competitive but internally collaborative. And I enjoy that part quite a bit. It was a big selling point for me also in the shift.

Lizzie Mintus: Can you talk about how Lightspeed and Bitcraft differ and their investment strategy?

Moritz Baier-Lentz: Yeah, I can only speak about the gaming side here because I think everything else would be a bit of a weird comparison. There are the obvious things like the scale is different. The geographic focus is slightly different. The stage is slightly different because we would look at opportunities in growth stage while I think for Bitcraft it's primarily early stage or the serious C range of investment opportunities.

But I think as it relates to gaming and interactive media. Frankly, I don't think the scope is fundamentally different. Like Bitcraft, we always looked at studios, platforms and tech within gaming or adjacent industries and I carried forward that same perspective to Lightspeed. Making the switch was a good opportunity to take a step back and re evaluate again from first principles.

So I went into this big data crunching exercise, between the two jobs, only to arrive at the same conclusion that I think that scope makes a lot of sense. Content is a lot about investing in studios and we should talk about that if you like, but I have a pretty stern perspectives on studio investing and where games investing might make sense or not. And so we can chat about that if you like.

Lizzie Mintus: Let's go. Yeah. Tell me about it.

Moritz Baier-Lentz: I've been on roughly two to three studios per year since I started this career as a VC. So in the four years, I've actually really only invested in not even two handful of studios. I think, strictly speaking, games shouldn't be funded. It should be great games companies that get funded. VC is not a replacement for publisher funding and the outlook or the interest or the motivation out of which a VC invests is to have this small chance to find a generational company that really makes a dent on the fund. Ultimately, we're in the business of 3x, 4x plus in our funds and returning money to our LPs. That is a very outlier driven business.

For our size, for example, for a 7 billion fund, you need to get to a 10 billion outcome before you actually meaningfully contribute to the return profile of the fund. So most games, even if they work out, don't necessarily have the ambition to become this broad, long lasting, forever platform. I think that's the right word.

We're looking for things that can be amazing companies and cultures, or long lasting platforms. And so things like developing your own IP, thinking about live ops from the get go launching with a one year content strategy, thinking about transmedia opportunities and like all that kind of stuff, I think we'd rather take a small shot at a really big swing than a lot of small ones. Because the problem with the smaller ones is that even if they work out, and we've seen great indie stories over the last two years, specifically, it's really hard to build that into a multi billion business, even if it works. While the companies that are set up like it from the get go, I think have a slightly larger chance.

So that's the bar for the studios is, do we see the light at the end of the tunnel for this to become like a $5 billion plus company? And it's excruciatingly hard to get there, but I at least wanna see that little bit of light. But yeah, I think it'd be interesting to be a gaming we see of scale and not invest in content. That's where we've seen by far the most attractive exits really over the last 20 years and especially in the last five years also.

And then once you get to tech and platforms, the air actually gets pretty thin. There are only a few examples of call it 5 billion plus companies. Roblox, Discord, Unity, Unreal, if it were not part of Epic Games, maybe. Then for those areas, the question becomes not only is this something that can attract a decent amount of users or revenue, how will this be a generational company that really will drive a paradigm shift in the industry.

So for technology, it's not enough to be a tool or improve workflows and help devs build better, faster, cheaper. It almost needs to produce a new engine. Actually, engines are the only gaming tech companies that have crossed the five billion hurdle. Quite frankly, one, maybe you could make the argument for two. Taking that lens, sometimes there's a little freeing, although it's limiting to look at things in this way and ask yourself every single time, even in the seed round, is this something that can scale to this size? That's ultimately the business we're in.

And I see it when I look at enterprise consumer fintech healthcare companies that my partners bring forward and how the narrative is. is put forward in those cases. And again, ultimately, if we don't find anything in gaming or interactive media that we like, we don't have any duty or pre assigned allocation. It's not be the craziest thing in the world if we don't find anything we love for a whole year.

Lizzie Mintus: Yeah, I wanted to ask you about your strategy because it's quite different than other gaming VCs. So you talked a lot about companies becoming generational. What makes you believe that they're going to be generational?

Moritz Baier-Lentz: This is a good time to birth a generational company because a lot of the previous generational companies were the ones that really nailed a platform shift, either from PC console to mobile or even before that, social connectivity forward approach when that was a novelty. Take Zynga, for example, there were incumbents at the time that could have owned mobile as a new platform, but it wasn't good enough to just port existing PC console titles over. Having that phone in your pocket and having it on the go creates a completely new way to engage with games, which is a lot more frequent, shorter durations.

I think it takes companies that are not just playing not to lose, but actually playing to win, to nail these things. And it typically takes a company culture that embraces new opportunities almost as a foundation for a new venture, where others might just dipping their toes into it. I think we see that again now. Obviously on the tech incumbent side, there's a lot of strength and advantage as it comes to generative AI, most notably compute and data access. But nevertheless, I think the same thing happens over and over again. We would be out of our jobs if we didn't believe that. And we have, again and again shown that there is room for innovation from startups that then grow to become the new incumbents. So that's when I say generational company, it's typically a new paradigm shift forward way of building an entire culture and business.

Lizzie Mintus: Yeah. So you have to be so different to work.

Moritz Baier-Lentz: I think to create value of this size, you have to do something different.

Lizzie Mintus: Yeah. What are some of the most common mistakes that you see startups make when seeking venture capital? I want to know the mistakes they make. Also you said, not all companies, most companies should not take venture capital. There are games to do. So I'd love for you to talk about both of those.

Moritz Baier-Lentz: Yeah. If you look at the sheer size of game studios, for a lot of them, the publisher funded model or even completely bootstrapping a company works for a lot of them. Crowdfunding and Kickstarter works for a lot of them. There's no need to take venture capital, unless you're really reaching very high and it goes well beyond, I have a great game idea to I want to fundamentally build something that challenges activision Blizzard and Riot Games in the next five to ten years. I think the latter, very few people honestly say that to themselves when they're starting out. Most fit into the category of I have a really cool idea and a team that I know can build a great game and would love three to five million for that.

I think those are very different. use cases. If you're looking at the sheer amount of games started in a given year, generational companies in quotation marks will see one per year, new games. You'd have to check the statistic and it depends a bit on how you count, but it's probably in the 10,000s, I would guess.

Lizzie Mintus: Yeah, I'm only getting higher. If people are pitching, I'd love to know, I think a lot of the listeners are trying to raise money, perhaps from you, perhaps from some other fund. What are some of the most common mistakes in a pitch that people could

avoid?

Moritz Baier-Lentz: For an early stage pitch, it ultimately comes down, I would say 80, 90 percent to the team. And it doesn't mean team credentials in terms of, we've worked at these companies. It's more the unique insight and capabilities, focusing on the skills and the experiences. A lot of the time I see, we worked on these games, we worked for these companies, but really being explicit what the role actually entailed. That's an area where we focus for reference checks quite a bit as well. Was this person instrumental in creating something of value? Is this the person that if we ask others on the project, who are the number one, two, three most important people of making this success?

Is this a success? Would this name come up on a no name basis. I'll say, if I get really excited about a team, I've actually never had the case that they're not also building, quote unquote, the right thing. To take the example of a studio, I think the founders I really get excited about, they all built multiplayer, they're all usually have a cross platform vision. There's usually a live ops element to it. They know about the importance of distribution in addition to building the product. And so it actually rarely happens that I say, I love this team. But the idea is not great. I actually think that never happened. I have a lot of the idea is great, but I'm not super sure about the team. And if I've learned one thing in four years, it's a very dangerous mistake of falling in love with an idea if you're not 100 percent convinced about the team. My question that I asked myself is, would I leave my current job and work for that team? And if the answer is no, then it's a no.

I like my job, just to be clear.

Lizzie Mintus: This is really just a recruitment podcast for you.

Moritz Baier-Lentz: This is how I invest. That's how look at like 1000 or 2000 a year and invest in two, right? That's how some of the checks I run from my mind. I might be a terrible investor. I don't even know yet. A lot of my investments, even the ones from the BitCraft days are still pre launch. So who am I to judge what's good? I'll get my receipts in the next three, four, five years. Maybe this podcast won't age so well.

Lizzie Mintus: That's the spirit. So what else do you look for in the founding team? What's the ideal size of a team? You talked a little bit about background being instrumental in making a success successful. And what kind of makeup should you have like business versus creative versus technical?

Moritz Baier-Lentz: Yeah,have aith strong preference for founding teams. I think that's a good call out. I don't think any of my investments have been solo founders. It's usually at least two people, two to four. There needs to be at least one person who is a strong CEO, because it is just really important. If we know one thing about the startup or the idea is that's another reason why team is so important is markets and products will change inevitably.

The only thing you can always be certain of is that what you get pitched as a seat. A deck is not how the company looks when it goes public, but there is a person that will navigate all these turns and pivots. And that's who ultimately you're putting your trust in. So there needs to be a person like that. Typically for studios, it's someone who has been a lead designer or lead producer. The best thing that can happen from a team or talent perspective on a call, and I think it's a little bit harder maybe for studios than it is for platform and tech companies, is, we spend so much time thinking through what are actually valid hypotheses, not just chasing trends.

I think, it's very easy to say that ultimately XR will replace traditional screens. I'd actually find it crazy if that doesn't happen. But when, when will we see a certain install base, active install base and AR VR that warrants like certain outcomes, that's where we spend a lot of time and talking to research analysts and equity research. That's an example for XR.

Anyway, where I'm headed with this is it's very easy to fall in love with the future. AI is going to change things. XR is the future. There are many other things where those are inevitable truths, but In two and five and seven and 10 years, even if certain trends are great, like how does the dynamic of startups actually capitalizing on trends unfold?

We spent all our time like talking to people, seeing tons of pictures, even for example, prompt to game. I've looked at 25 companies in the last 30 days, which is basically the entire universe. 3d assets, right? Like I'm tracking, 30-40 gen AI 3d asset companies, and this is where I finally close this loop. Sometimes you find someone who has such an interesting stance and argues from first principles or deep domain expertise in a way where you really get this nugget that is such a profound, interesting insight. I would say that happens to me maybe once a month, not more than that. It's actually always super attractive when it happens because it almost wakes you up from this cadence of taking pitch calls. And you're like, damn, that actually changed how I think about this. Or if this is a unique insight that if true is profound, I love those kind of founders.

Lizzie Mintus: Do you feel frustrated if you can't invest in them because it's not generational, they have a crazy good idea or

Moritz Baier-Lentz: It's usually very related. I only get this feeling when it is attached to a lot of potential value creation. So I think they're actually pretty intertwined.

Lizzie Mintus: Yeah. I wanted to pick your brain on XR too. What, if you don't mind is the analysis, when is it going to become so mainstream? It's been a question for a long time.

Moritz Baier-Lentz: Again, I'm a huge fan. Behind me, on the couch, all the headsets, including Division Pro, we've done a lot of testing, subjective testing, in addition to going deep into monthly active users of XR install base and shipment. projections until 27, 28 or so. The answer here also again differs by fund size. But I think for a fund of our size, it's relatively hard to make a case for outcomes of the scale that turned the needle for us just based on the active and stall base.

And XR enjoys a lot of mindshare obviously helped by the vision pro release last month, but right now the active VR install base is something like 5 to 7 million. It's really hard to make a case to build a game or experience for an audience of 5 to 7 million when you can build a mobile game with a potential market of three thousand million.

And then to see that, for example, Division Pro will ship an estimated 12 million units and in that time frame that doesn't really get you a lot more comfortable that there's going to be, I'd say 100, million install base or ideally 200 million active install base. Active is also key word in XR because right now we don't see a whole lot of strong recurring monthly active usage. Again, I'm a big fan. I enjoy the experiences, but if I'm perfectly honest with myself, I also come back to XR not as much as I think, although it looks so amazing. I'm just gonna, my game pad, cause it's right here and then play another round of Rocket League. It's just more convenient right now. VR, I think is cool, but I can't wait to have actually reasonably working AR glasses. I think it's going to be a big productivity booster.

Lizzie Mintus: Yeah. There's Jerry from Tilt 5. You can connect with her.

Moritz Baier-Lentz: I invested in Tilt 5.

Lizzie Mintus: Oh! I didn't know that. It's a really small game. It's a world. That's funny. So would you invest in a company, very early stage, where all of the founders didn't come from games? I'm guessing no. Or if some of the founders didn't come from games, you think that it's possible to make a game or a platform. if you have an outside perspective.

Moritz Baier-Lentz: To build a studio?

Lizzie Mintus: To build a studio or to build game tech?

Moritz Baier-Lentz: I think game tech for sure. There are examples. Studio, in the traditional sense, I think the answer would be no for investment. Can they pull it off? People can always do amazing things. It would be intellectually dishonest to say no. But I think if you are not coming at it from the traditional industry, then the approach should probably also be non traditional because you have to almost win on your quirkiness. It could be a UEFN or Roblox forward or exclusive kind of like approach to rolling up content and iterating and testing really quickly or stuff like that. We see quite a bit. That makes sense to me. This is also something we look at. I almost put that more in the category of platforms.

But yeah, I, also super interesting combinations are teaming up a very experienced, traditional game designer with a deeply knowledgeable AI expert who's new to games. Combinations like that, I think, are where the magic happens.

Lizzie Mintus: Yeah. So it can happen. Just not in the studio.

What question do you wish that entrepreneurs would ask you that they don't ask in games?

Moritz Baier-Lentz: We usually reserve ample time for founders to also get to know us. I think it's always a nice sign that they are being thoughtful about who they're partnering up with. If this all works out, we're going to be in it together for 10 years.

Lizzie Mintus: You're getting married.

Moritz Baier-Lentz: Yeah. People say that always. It's like a marriage. I don't think it's like that. I don't know those people's marriages, but maybe their marriages are not that's great. They over dramatize a bit. But yeah, a lot of my portfolio companies I talked to every day, more than half I talked to every day if they want that. I have one portfolio company where I speak with the CEO every two to three months or so, because they're really just heads down on building. It's great when founders are inquisitive and the whole thing turns a little bit into the reverse pitching motion.

It's also, I think the best way to win competitive deals is to let founders naturally find out and learn more about our work as partners. That's typically best told, not through our own words, but by introducing them to existing portfolio companies and just setting them up for dinner conversations with existing CEOs where they can talk about the good, the bad, the ugly, never all good. But a lot of it is pretty good, I think.

Lizzie Mintus: Also the best recruitment strategy, you have a good candidate, you want to close, have them talk to different people that work there. There's some parallels.

Okay, feel free to anonymize, but I'd love to hear a bit about the best pitch that you've ever gotten and what made it so good.

Moritz Baier-Lentz: Yeah, I think this one is easy, actually. I want to put an emphasis on best pitch ever received or seen. This is not necessarily indicative of most excited to ever invest, because I think it's a lot harder to evoke that sense of emotion when it's an initial round and it's really just a team and a concept.

 There are some that I've been incredibly excited about and they're still going great. So far, so good on those. But I think I would have to be honest here and pick gardens in the series A, and by the way This was a deal that I passed on in the seat round and dismissed it for being too indie. Exactly along the lines of what we talked about in the beginning. I thought these are two cute brothers, sorry Chris and Steven if you're listening, who just want to build a game. They always wanted to build and their background was a bit more on the indie side of things. To be fair with pretty scaled commercial successes.

So there's one of the interesting things about this team is it's an indie born studio, but with games that actually managed to cross into the mainstream in a significant commercial way, starting with Journey, What Remains of Edith Finch, and then certainly Sky, where Chris was lead designer. People don't know how much money this game is making, especially in China, but it's a lot. I think people would be surprised to find out.

But yeah, I thought, It's a good team. I also didn't really do my homework on the references, frankly, because I dismissed the product. And then we reconnected when we started the gaming practice around February, March last year. And why this is the best pitch ever is it was a really clever set up at a GDC where investors would sit down, it was just a really well done, very curated walkthrough through the product vision, which I don't think had changed, but was articulated nicer. I don't want to take away the blame from me for not finding the seed round. But then the thing that you can get around is just putting a prototype in front of people that was really so awesome to play. Usually when we spend time with prototypes, especially when it's less than a year of development. It's like looking at someone's baby where you're never really in love with someone else's baby. Sometimes they're just straightforward, ugly, and you're like glad it's over. And even if they're pretty, you're like, Yeah, it's a really pretty baby. But it's actually really rare that you're like, Oh my God, can I spend more time with this baby?

I'm gonna actually cancel what I've what I was planning to do. I just want to hang out here for another two hours with this baby because your baby is so beautiful. And so fucking awesome. That really doesn't happen in real life, right? They managed to build something that creates such an emotional involvement and this desire to explore in all the right ways where the things that make it so special are also the ways in which you can see this really scale and become a big hit. Very fresh, but very mainstream at the same time. I was like, damn. Really have to figure this one out.

 Also like the syndicate that we build around this and with Nintendo's first time, they, they got exposure to any early stage. Company because they're obviously very cognizant of their brand involvement. For them to put their name behind this project, I think it goes a long way and Mike Moheim, the Blizzard founder and longtime CEO, investing through Dreamhaven and we have representation from Microsoft and Sony as well. So all three Platforms. Krafton and Ascol at the round, it was a tight and hard negotiation.

The game is about bringing strangers together. And so I feel like they managed to do that even in the syndication. Shortly after the series A, we went on a trip to Japan and Korea, in part to meet with the Nintendo family, but also to visit regional publishers in both countries early. We did the same thing. We set up these demos. I think it had evolved to almost like a master class in pitching where it was just such a joy as an investor to sit through these pitches with little thoughtful gifts that were brought, concept art on the table to pass around, which some of the future investors asked to keep so they could hang it in the office room. There were some interesting reactions to it all that you just usually don't get. Yeah, we had an awesome time there.

I hope I don't offend any of my other babies. All of them are so beautiful.

Lizzie Mintus: You want to spend time with them. You're going to cancel your plan. How relevant do you think IPOs are right now for an exit strategy for games? Or do you think M&A continues to be the primary option?

Moritz Baier-Lentz: Yeah, I think for content, my gut feeling is, just looking historically, this has been more of an M&A territory. You look at not just large game companies, but media and tech companies over the last five years, really recognizing gaming as the leading media category. High grossing content is still a pretty scarce asset and significant premia are being paid. Just look at the Microsoft Activision acquisition. But even before that, ZMX acquisition was a good example too. So studios are also not as great businesses. They're still a little bit more lumpy and hit driven. Even in the game as a service forward world or business model. For all these reasons, I think that's gonna remain M&A territory. And the games company that will go public are probably more the platforms and the tech companies, the next Roblox, the next discord, the next Unity, that operate a little bit more like a software as a service business.

Lizzie Mintus: Yeah, you've been a part of so many massive deals. What advice do you have around M&A? When should companies think about being acquired? How should they figure out who to go with?

Moritz Baier-Lentz: That's ultimately it's a decision for the founder, or it's a decision that's done jointly with investors and board members. There's so many factors that go into the consideration of what the right timing or moment is. Scale, the founders, Desires for the future of the company. Probably the two most important ones, just like with everything in life, and this is the same answer for, certainly foM&Aa, and getting to know potential acquirers early. I think most companies I invested in, I've known the team for over a year. On average, it's probably more than 12 months.

So don't just go out to raise money when you need it or need it. It's I get a lot more comfortable to say this is one of the two things we're investing in this year when I actually have history. It just helps getting comfortable with what is ultimately a pretty big decision. I think the same works for M&A. The best M&A outcomes were probably the ones where a conversation or relationship building has or had already happened for a long time leading up to it. And then M&A processes, like some of the large ones, can take a year.

Lizzie Mintus: Yeah. How long did Activision.? Take more than that.

Moritz Baier-Lentz: There was a whole regulatory aftermath, right? I don't know how long. Again, it's a philosophical question because this conversation of Microsoft to acquire Activision behind closed doors, that might have been going on for five years.

Lizzie Mintus: Yeah, true. I want to talk a little bit about imposter syndrome. You are Forbes 30 under 30. You ran seven marathons in seven days. You've done all this wild stuff. I'm sure you're often one of the youngest people in your firms, in your career. Have you dealt with imposter syndrome? And if so, how have you navigated it?

Moritz Baier-Lentz: I didn't know we're getting so deep here, but I'm always a fan for candor and vulnerability too.

Lizzie Mintus: I just have some things I wanna know from you, .

Moritz Baier-Lentz: Yeah. I like talking about these things. I would say that whether raw drive and motivation for some of these things come from, I'm not so sure. It's certainly not my kind of socioeconomic environment during the formative years. And ironically, the one thing I can point to is probably the competitive video gaming as a teenager. That was probably the only intensity or extremity or whatever that happened in the years where you shape your character or persona.

I do think about a lot of things in life through that lens of gaming, not in a way where I'm like, Oh, I need to level up. What does it take to take reach the next milestone or whatever. But I think that what was beautiful about Diablo two, I actually barely played Diablo one, I was too young is, there's this almost infinite world of possibilities. It's this exercise of exploring this vast opportunity space and really trying to argue from first principles to chase global optima not local optima. Because of the skill combinations and especially like item combinations you could actually pursue some seemingly absurd things just to get an edge and break the meta and move the efficiency frontier forward or would go into great length even like scientific experiments to back solve into the algorithms of the game, many of which were not public to the player.

Now a lot of it is baked into the UI, but even damage per second was not straightforward at all. I think it took people like two to three years to really figure out how to properly calculate the damage you're causing. I love nerding out. At some point you get to this point, okay, maybe I should look at my whole life this way. Start ignoring what everyone else is doing and maybe play around mentally a little bit. And then just play around with the boundaries of things, whatever that means, whether that's moving to a different country or I applied to business school technically without an undergraduate degree.

Optimal solutions are extreme, just from a mathematical perspective. So I think to live an optimal life by the same logic, it needs to be somewhat extreme or weird. Yeah, the crazy ultra races, the main motivation is really to live life to its fullest. It's like a more of an adult version of YOLO. I enjoy doing crazy stuff just for the craziness itself. It's just the audacity to just sign up for the stuff, knowing that there's always a way to figure it out. Obviously I trained, but you don't need to be a professional athlete. Ironically, you don't need to be a professional athlete. at all to run seven marathons on seven continents in seven days. It sounds like this insurmountable task of like freakish outlier physical performance. I think if you can run a marathon in three hours, 30 minutes, you can probably run seven of them in seven days.

Lizzie Mintus: Just a mental game. You like that?

Moritz Baier-Lentz: Oh yeah, I mean like the mental part. At no time during that race did I think, I'm not going to be able to do it, or that I regretted it. There were other races. They were worse. Like Marathon des Sables was just like, seven, seven days through the Moroccan Sahara, and it's self sufficient and self navigated, which means you need to carry all gear, food, shelter on your back during that week, too. And it's in the sand, and it's 100 degrees, and you're also cut from civilization, so there's no communication with the outside world. That was a lot worse, and there were real moments of darkness. But the beauty of the human mind is that once you reach the finish line, you may not think that this was a good idea, net, and that maybe in this weird outlier case, the short term pain was actually not worth the long term gain.

Somehow, beautifully, your mind and your biochemistry makes you believe just a couple months later that everything was great and you look back at it with a smile, which is how I think about it right now. I definitely always recommend it to my enemies, but maybe also my friends, some of which are actually doing it, I think maybe, yeah, in two months. That's the next one.

Lizzie Mintus: Makes you feel alive and it helps you push your limit. I like to cold plunge a lot, which is, Nothing like quite to your extreme, but it makes you feel really alive. And if you can dunk yourself in really cold water voluntarily in the morning, you can do a lot of stuff.

Moritz Baier-Lentz: Yeah. I like warm showers. It seems like everyone's a little different.

Lizzie Mintus: A little different. Yeah. I think you'll get into cold plunge. That's super on trend for you.

Moritz Baier-Lentz: I've done them. I like them too. Don't get me wrong.

Lizzie Mintus: Yeah. I have one last question. Before I ask it. I wanna point people to the Lightspeed website gaming.lsvp.com. The last question is, if you could give founders who are preparing to pitch their game studio one piece of advice, what would it be?

Moritz Baier-Lentz: We already talked about a few things. I think early relationship building is important. Thinking about presenting something that's truly unique and insightful. for me, that's the number one, most impressive or most engaging thing to pull off.

I would spend time to look at previous investments that partner you're talking to has because I think that's ultimately reflective of the types of businesses and the types of people they're most drawn to.

Lizzie Mintus: Yeah, and reach out to a specific partner with a reason.

Moritz Baier-Lentz: Yeah, that's almost table stakes. It's also sometimes people think, Oh, if this person didn't like us, I just reach out. The very first thing we do when we get in an inbound that we're not sure about is we check the CRM and it pulls in the history. So the very first thing I would do is send it to whoever spoke to the company last and it's a net negative look to do it like we all talk behind the scenes a lot. Again, internally, we're not competitive with each other. A lot of the deals we end up doing were sourced by a different partner and we pass them along internally based on expertise. Interestingly enough, in over a year now, I've never seen a single instance where there was an internal fight about who's running with the deal or leading a deal. We only have one person for each area of expertise to write a check. And so it's very clear who's the best fit to diligence or invest in something.

Lizzie Mintus: Makes sense. We've been talking to Moritz Baier-Lentz, who is partner at Lightspeed. Moritz, where can people go to pitch you, contact you, or learn more about you?

Moritz Baier-Lentz: Yeah, we have our gaming specific microsite, gaming.lsvp.Com. We also have the Lightspeed website, which is without the subdomain, game at lsvp. com. I'm thinking too much about gaming. We have all our emails on both sites. That's also something that sometimes surprises me at conferences or in person events. People ask, can I get your email? I'm like, sure, but it's also, it's just publicly available pretty much in everywhere we're trying to be. We also have a form on the gaming site to submit pitches and everything lands in my inbox. I promise people I look at everything that arrives. The thing I wouldn't recommend is linkedIn or social platforms while I try and monitor that as well. I know that historically I've missed stuff there. That does not happen when it comes via email, either through the site or direct email.

Lizzie Mintus: Thank you so much.

Moritz Baier-Lentz: Thank you.

Thanks so much for listening to the show this week. To catch all the latest from Here's Waldo, you can follow us on LinkedIn. Be sure to click subscribe to get future episodes. We'll see you next time.