As consumers continue to reach for their phones and other mobile devices to find solutions to their needs, the mobile app market continues to grow exponentially. Mobile app revenues are projected to reach $4 billion in 2021 and over $5 billion by 2024. There’s a lot of competition, but there’s also widespread opportunity for quality apps that address users’ needs.
To get your app idea to the market, you need to secure funding to build it. That means you’ll need to find investors who see the value in what your app can provide. We’re going to take a look at the five best ways to get your app funded.
Why Should You Seek Investors?
Building an app can cost a lot of money, and the budget needs can fall into a wide range depending on what your app’s features will be. Will your app sell something? Will it connect to social networks like Facebook and Instagram? What kind of data will your app need to retain, and will your app need to pull in data from other sources? Each of these variables will have an impact on what your app will cost to make.
Unless you have a large amount of savings or find a pot of gold at the end of a rainbow, you’re going to need to seek financial investment to support the work of building an app. The great news is that there are a number of excellent options available to you for funding apps.
What Is Required To Get Investors for Your App?
If you’re asking someone to help fund your app, they’re going to expect more than a cocktail napkin sketch of your idea. The most effective way to share your idea is to create a small-scale version that meets your audience’s core pain points, also known as a Minimum Viable Product (MVP).
When you build an MVP, you can easily demonstrate to potential investors the value your app will offer its target market. The Designli SolutionLab walks you through the process of designing an MVP step-by-step to make sure you’re building the right thing that your audience will love, while minimizing up-front development costs. Once you get your app out to the market, you can validate your idea and continue to improve upon it, getting feedback from actual users, not speculation.
5 Options for Securing Funding for Your App
There are a number of options to raise funds to build an app, depending on your situation. Here are the most common methods used to secure app funding.
Just because you don’t have enough savings to fund your app doesn’t mean that you can’t still fund it. In addition to savings, you can consider taking out personal loans and credit card loans. You also have the option to ask friends and family to help with financial support for building your app.
2. Bring In a Partner
Another option is to look for a co-founder or partner that will meet the needs of your company. You may consider a tech co-founder that can establish your startup’s technical vision and oversee development work. You may also want to bring in a co-founder with money to invest in your new app idea, which can offer some strategic partnership. Or perhaps you can find a tech co-founder who is also able to invest.
Crowdfunding for app development, or crowdsourcing, is an attractive option for a company with a great app idea that they are confident people will love. It doesn’t require any financial resources — just a really amazing pitch to attract attention. Most platforms draw a service fee from the proceeds, and they don’t charge any up-front costs.
There are many different crowdfunding platforms to choose from, and the leader in this space is Kickstarter. Indiegogo is another popular option with more flexible terms. Kickstarter offers an all-or-nothing model, where you must reach your total funding goal in order to get any of the funds, but they also have flexible funding options that allow you to keep the funding with a higher service fee if you don’t reach your goal.
You can also use crowdfunding platforms explicitly designed for mobile apps. Though they may not have the attention that Kickstarter and Indiegogo do, they attract much more specific investors looking to support mobile app development. Some of the most popular of these are AppSplit and AppsFunder.
4. Raising Funds Through Donations
Though crowdfunding is a great way to raise money, it’s also very competitive. And any money you raise will be reduced by the fees collected by the platform you use. Raising donations from your own landing page instead of through a crowdfunding platform can be quite effective if you have a strong network established or a really compelling value proposition.
Create a landing page with an irresistible heading that lets prospective users know that you understand their pain points and have the solution that will resolve their issues. Then include a strong call to action asking them to support this venture to build the app. Consider what you will give them for their support. Maybe it’s the opportunity to be in the first group the app is available to, or even a small discount on the app’s download or services to thank them.
5. Angel Investors
Another funding option is seeking an app angel investor — an individual or group that provides capital to a business in exchange for equity in the company. Bringing on angel investors can help bridge the gap between the funds you can raise bootstrapping or with partners and the money you may still need to build and support the app.
This relationship is often more than just a monetary one, as app investors often want to play a role in the company’s progress. Their expertise and mentorship can play a crucial role in driving a startup towards success. If you’re passionate about your app but don’t have experience bringing one to market previously, working with an angel investor may be an appealing opportunity for fundraising.
If you’re interested in working with angel investors, create a winning pitch deck that will wow them with your understanding of the market opportunity and your efforts to address it. A quality pitch deck shows that you’re a serious contender worth their attention.
The Best Ways To Get App Funding
How will you decide the best way to secure funding for your app when there are so many options? As you can see, it’ll likely depend on where you are in the process of defining your target market and building your app. Though many people immediately think of venture capital for app funding, the methods discussed above are easier to secure in order to keep your app moving forward.
Want to learn more about how we help clients build intuitive, engaging apps? Get in touch.