How to Structure Venture Investments in Game Development and Esports: A Legal Analysis by Intermarium

Game Development & Esports – The New Magnet for Venture Capital

The gaming and esports sectors have become one of the fastest-growing investment areas of the 2020s. The video game industry has already surpassed the film industry in revenue, while esports is attracting billions in investments from venture funds and private investors.

Ukrainian companies like GSC Game World (S.T.A.L.K.E.R.), Plarium, Frag Lab, and Room 8 Studio have already proven their ability to create world-class products. However, venture investments in game development and esports come with unique legal challenges that need to be addressed before closing a deal.

In this review, we highlight the key challenges and optimal solutions for venture capital investments in Ukrainian gaming startups and esports projects.

Key Legal Challenges in Investing in Game Development & Esports

Business Structuring: Ukrainian Studio or International Holding? Many game development studios in Ukraine initially operate as small freelancer teams or independent LLCs, which are not always attractive to venture investors.

How is this addressed?

✔ Registering a holding company in a venture-friendly jurisdiction (Delaware, UK, Estonia).

✔ Transferring all assets and IP rights to this holding entity.

✔ Implementing corporate governance structures with a clear equity distribution model among investors and founders.

Intermarium helps Ukrainian studios establish the right structure for attracting investments from international funds.

Intellectual Property in Game Development: How to Ensure Control Over Assets?

In game development, intellectual property is the company’s main asset. If improperly registered, IP ownership issues can jeopardize a deal or cause conflicts between investors and founders.

How is this addressed?

✔ Conducting IP due diligence before investment to verify all agreements with developers.

✔ Drafting an IP Assignment Agreement, transferring all studio-developed assets to the holding company.

✔ Securing patents, trademarks, and unique technologies used in the game.

✔ Providing legal support for licensing agreements, especially if the game includes third-party content or tools.

Intermarium advises investors on protecting intellectual property in gaming startup financing.

Esports & Tournament Investments: Legal Challenges

Esports is becoming a new category of sports business, attracting global investments. However, organizing esports tournaments and managing teams comes with legal complexities.

Common challenges:

• Licensing issues – Some countries classify esports under gambling laws, complicating investment structures.
• Player contracts – Investors need to ensure that players have clear legal obligations to their teams.
• Taxation of prize pools – Different countries impose varying tax rates on winnings.

How is this addressed?

✔ Registering an esports organization in a jurisdiction that supports esports (e.g., Estonia, Malta, Canada).

✔ Developing legal contracts for players and coaches that protect investor interests.

✔ Optimizing tax structures for prize money distribution through proper business registration.

Intermarium helps investors structure esports projects properly for international capital attraction.

Legal Structuring of Investments: How to Protect Capital?

Investors in game development and esports need clear control over their investments and defined exit mechanisms.

How is this addressed?

✔ Using SAFE agreements or Convertible Notes, allowing investors to acquire equity once certain conditions (e.g., game release) are met.

✔ Signing a Shareholders Agreement (SHA) that defines company governance and profit distribution rules.

✔ Including anti-dilution protections to prevent investors from losing equity share in future funding rounds.

✔ Exit strategy planning – through IPO, acquisition by a strategic investor, or founder buyout.

Intermarium structures investment deals in game development and esports, minimizing risks for funds and private investors.

Conclusions: How to Invest in Game Development & Esports Without Risks?

• Game development and esports are among the most promising sectors for venture capital.
• Legal risks can derail a deal if not addressed during the negotiation stage.
• Venture investors must secure IP rights, establish a corporate structure, and define exit strategies clearly.

Intermarium helps:

✔ Structure companies for venture financing.

✔ Secure intellectual property rights.

✔ Develop investor protection mechanisms in venture deals.

✔ Optimize tax models for gaming startups and esports organizations.

Planning to attract investments in game development or esports? Contact Intermarium – we’ll help you structure it the right way!