If you want to start a mobile app and make money today, the way you obtain funding differs from the past. In fact, it’s better compared to what developers experienced before.
The internet has opened up endless possibilities for mobile app developers. With the rise of new business models and technologies, more opportunities exist to make money from your mobile apps. If you haven’t yet thought about how you can execute your idea, don’t fret — there’s still plenty of time to get the funding.
That said, this article discusses some ways you can acquire funding for your mobile app idea.
Ways to get Funding for App
1. Angel Investors
Angel investors are wealthy individuals or groups who invest in start-ups. They typically invest smaller amounts of money than venture capitalists. They’re an excellent way to raise funds for any project. You can find these investors in many ways, such as through networking or a business plan competition.
Unlike traditional investors, angel investors don’t ask for equity in the company. Instead, they provide the funding start-ups need to start and maintain the business. However, remember that angel investors require some type of repayment on their investments. Still, repayment comes usually at a later date than traditional investors need.
The best part about angel investors is that they’re more willing to invest in start-ups than other investors. Your business idea will have more time before you repay the investment, and they don’t want any equity in your company.
2. Taking Out A Bank Loan
Uncertainty characterizes start-up loans. It isn’t easy to prove and guarantee your income and future profits. Because of this, most banks don’t easily agree to finance start-ups. They’re considered risky businesses with little to no return on investment. As such, borrowers must meet stringent requirements, complexity and period to get the loan. Most developers don’t find this the easiest way to get funding for their projects.
Even then, there are still bank loan products you can explore. You can consider taking out a personal loan. These are small business loans secured or unsecured, you can apply to get funding.
Secured loans need security or collateral, such as your home or car. And if you’re late or fail on your repayment, the lender can seize the collateral to recoup their losses. On the other hand, unsecured loans don’t need any collateral. And if you fail on the loan, the lender can’t seize your assets.
The type of loan you choose depends on many factors. These include your credit score and the amount of money you need to borrow. With good credit, you can qualify for an unsecured loan. However, you may need a secured loan if you have a less-than-perfect credit score.
3. Bootstrapping
Bootstrapping involves using your resources to finance your app development instead of seeking outside investment. In other words, you use your resources, or your friends’ and family’s, to finance your project.
There are several advantages to bootstrapping your projects. For one, it allows you to retain control over your venture. You’re not beholden to any investors or lenders. As such, you can make all the decisions about your project yourself. Plus, it’s often easier to obtain funding through bootstrapping than through loans or venture capital. Not to mention that it can be less expensive to bootstrap your project than get funding through other means.
There are also some disadvantages to bootstrapping your project. First, raising the resources you need to finance your project can be more difficult. And you might have to put in a lot more work to get your project off the ground.
4. Crowdfunding
You can also look into crowdfunding. Crowdfunding is when you finance a project by raising funds from a large number of people, usually through the internet. This can provide the perfect solution if you want to get your mobile app off the ground but don’t have the necessary funds.
You can crowdfund in many ways, but the most popular is through social media platforms like Facebook and Instagram. Furthermore, you can try different crowdfunding platforms to get funding for your mobile app development.
One of the great things about crowdfunding your app is that it allows you to get feedback from potential users early on. This feedback is invaluable in helping you refine your app and make it the best it can be. Crowdfunding can be an excellent way to create buzz and excitement around your app before it launches. This can help ensure your app is successful upon launch.
If you’re thinking about crowdfunding your app, be sure to check out the crowdfunding platform Kickstarter. Kickstarter is an excellent crowdfunding platform and has helped fund several successful apps.
5. Investor Pitching
The fifthstep in raise funding for your app idea is to develop a pitch for investors. Creating a clear and concise pitch presentation outlining your app idea, your target market and your business model can boost your chances of landing an investor. Additionally, your pitch should explain why you believe your app can be successful and how you plan to generate revenue.
When developing your pitch, remember that investors are looking for new and innovative ideas that have the potential to generate a return on their investment. If you don’t know where and how to start, there are many resources available to help you develop a compelling pitch for investors. Additionally, there are several online and offline events where you can present your pitch to potential investors.
Pitching an investor means bringing in a partner with an equal share of the app, and they bring in money. A partnership provides enough funds for your app development and allows you to share the risk of the project. It also gives you access to resources that may not otherwise be readily available.
One downside of this type of partnership is that it requires negotiation and compromise from both parties. Compromise is a bit challenging when dealing with two different parties that have their interests at heart.
Bottomline
You can approach investors, crowdfunding platforms, or even bootstrapping for funding your mobile app idea. Angel investors and venture capitalists are the most popular ways to get funding sources for mobile app development. However, they can also be the most difficult to obtain. These investors typically invest large sums of money in exchange for an equity stake in your company.
Crowdfunding is another option for funding your mobile app. With crowdfunding, you set a financial goal, and people can pledge money to help you reach it. If you don’t attain your goal, you don’t receive the pledged money. But if you succeed, you receive significant funding. Bootstrapping and bank personal loans provide funding for mobile app development. Use your savings or take out loans to finance your app development.
