How to Get Funding for Your Mobile App–based Startup?
“How to Get Funding for Your Mobile App–based Startup?” by Jamie Waltz
The mobile app market is lucrative as a revenue-earning space for many. As apps have penetrated almost every niche of our daily lives, it is likely for aspiring developers to wish to try their innovative app ideas. But a great app idea needs the support of appropriate development, and this involves quite a hefty investment.
But you don’t need to feel demoralised because of the investment requirements. Many great app startups just have successfully built an app from scratch through the financial support of people they initially couldn’t figure out. So, if your idea is excellent and you can generate a proof of concept to convince people, you will be able to fetch investment as well.
How to get investment for the app project and where to fetch it? Well, these are the questions we are going to explain here. Let’s begin.
Evaluate the Idea and Create a Proof of Concept
First of all, you need to think about why someone will show interest in funding your mobile app project as an investor? Before investing funds into your app project, they need to be convinced about the revenue earning potential of the app. This process of evaluation begins with you.
It would help if you validated the app idea from the perspective of target users. Since every app comes as a solution to multiple user problems, you must ask what problems it will solve and how the answer is relevant to the problem.
After validating the app idea, you must create a proof of concept that showcases the key value propositions of your app. Then, you can create a basic MVP or Minimum Viable Product that, with the elementary features, address a core user problem most relevant to the app idea. This MVP version will help attract investors.
Figure out How Much Money You Need
The second most important thing is figuring out the money you need to build the app. To make the correct estimation of the development cost, it is advisable to consult a reputed mobile app development company and some experienced freelancers. While both ends’ estimates will differ, you can choose a middle ground as the legitimate development cost.
When figuring out the development cost, always segregate the cost components from start to finish. For example, consider the initial wireframing and prototyping cost followed by core development, QA testing, and deployment. For long-term cost projection, you can also consider support and maintenance costs.
Your close acquaintances like the family and friends are the first to count upon. They are the people to convince you that the app idea is worth investing in. But it is found that in most cases, close acquaintances and connections can only make a significant investment when the project just begins to roll. However, this investment is still important for market research and design prototyping.
Another great way to find the investment is to invite your near and dear ones with a sound financial profile to get onboard behind the project as co-founders. This happens only when the person becomes thoroughly convinced about the revenue-earning potential of the app. Such co-founder investors can also be found in your social connections.
Participating in App Contests
These days, you have many app contests around the globe that fairly rewards the app ideas with credible proofs of their concepts. Of course, these contests are highly competitive, but they are great for introducing your app idea to credible entrepreneurs who consider your idea worthy of investment. In contests, you need to bring a proof of concept or an MVP version, or just a demo app representing the idea.
Crowdfunding is another significant way to raise funds for an app project. There are many such platforms through which people with small donations help tech projects to see the light. Obviously, here you need to come with a really winning combination of a great idea, an equally great proof of concept, solid influencer backup, and great content marketing to attract investors.
When an ambitious large app project needs serious investment, this is the best funding route to look up to. The angel investors and venture capitalist companies can be contacted over the internet, and you need to present them with a well-articulated pitch with the core idea followed by a demo proof of concept.
Prepare an Effective Elevator Pitch
Since you are trying to convince people to put money on your app idea, you have to pitch the concept and its value propositions in a well-articulated and convincing manner. First, you have to prepare a quick and well-explained brief on the app idea. This is important because many investors do not have too much time to listen to the plan elaborately.
Come up with a short briefing taking less than a minute that clearly sums up the whole app idea with the crux of the project, punch line, the core problem it handles and the limitations on the way, key features, and a clear plan future objectives. You should also deck the elevator pitch to the proper presentation channels. Using PowerPoint and Slideshow can be very effective in pitching the idea precisely.
So, getting funds for an app project is not difficult if you are persistent and patient enough to go through all these steps without making a wrong move. Since it is a highly competitive zone, every action counts here. Therefore, you should be meticulous about everything, from the app idea to choosing the potential investors to pitch the idea properly.