Wouldn’t it be a lot easier if there was a secret formula to get money for your app startup? Unfortunately, raising approximately $1 million for your mobile application startup isn’t a child’s play, more so if you haven’t proved that customers desire your product.
But then of course, it is a part of every startup journey, right?Many entrepreneurs assume that investors would be interested to spend in their mobile application right at the idea stage.
However, they fail to understand that even a great app idea cannot intrigue investors unless it is validated that customers want your product.
This is because there lay a whole lot of difference between a great idea and a great product. As you give shape to an idea, it changes and grows.
Investors who would spend on your mobile app startup know that there would be many similar app ideas. The difference lies in how the idea transforms into a product in a unique way.
And when you are able to prove how you plan the execution, you gain a better chance of raising funds for your app startup business. Here are some easy ways to get money to build your first app.
1. Nail your sales pitch
When you approach an investor, it is important to understand that twenty others like you might have already visited him to raise app money. Therefore, it is crucial that you hone your sales pitch before communicating app idea with investors.
Merely promoting what your app would be all about isn’t enough to win their hearts. You should present it most uniquely and in a manner that would let your investors connect with your app right from the idea stage.
Most importantly, you should be confident about what you say. Mastering your sales pitch would help you in everything – from identifying competitive advantage to writing emails.
2. Participate in app contests
If you are confident that you have an awesome mobile app idea, one good way to raise money is to participate in app contests. Several app contests are held globally where the best ideas win money to fund the development process.
Many of these contests are also held by angel funds and business incubators, with the focus to inspire developers to build unique and amazing mobile apps.
Needless to say, these kinds of contests are extremely competitive, and you need to make a strong sales pitch to impress the investors. At the same time, you should also have a fantastic app idea and show how it is anticipated to change lives.
3. Bank Loans
Most banks and financial institutions provide small business loans to startup entrepreneurs; however, getting a loan to build an app for the first time is still in its nascent stage.
Delightfully, if you are able to present your bank with a strong app business plan with effective market research, budgeting, revenue projections, etc, it may become easy to raise fund for your app startup. At the same time, you should also need to convince them about your business, product and its market.
4. Venture capitalist and angel investors
Venture capitalists would invest money on your app only based on a risk/return ratio. Therefore, you should be able to clearly convince them about what your app is intended to achieve, how it can change lives or attract downloads, and what revenues you are expecting.
Venture capitalists would evaluate the return on the basis of business risks that a startup would face, and then determine whether to invest or not. On the other hand, angel investors are the ones who invest in businesses that have an idea or concept, and have not yet materialized.
If you can make them believe in your app idea, they will fund you. However, angel investments are easy to get when you can demonstrate a prototype or first release version of your mobile application.
5. Family and friends
Make a practical list of everyone in your family or friends who would believe in your app idea and spend enough money in it. At least you can have them to help you build the initial prototype.
Though it is a risky way, and you should not depend on it entirely, it is crucial that you be clear and candid with them about the risks of investing.
One of the best ways to convince your family and friends is to take them through your business plan, and if possible, involve them somewhere in the process.
They would not only feel important and consider them a part of the project, but would also be forgiving enough than your investors and angel funds. Make sure that you keep your friends and family only as a last resort for your money.
6. Build a prototype
If you are able to spend at least some money yourself, and build a prototype or first release version of your mobile application, it would become a lot easier to get funding for further development stages.
When you have a product up and running in the market or at least a simulation of the same, it can convince your investors better. They would be confident that you are serious about the business.
Moreover, when you release first version of the app or test its prototype in the market, you can also prove that your mobile application actually has a demand. This would further convince your investors to spend money on a product that has a demand in the market.
Getting funds for your mobile app startup depends a lot on your concept or idea, and networking skills. Don’t shy away and meet as many investors as possible.
Find other dynamic entrepreneurs who have raised funds to build their mobile applications in initial phases, and talk to them about their experience. Know your facts well, and don’t get irritated when you face several arguments in a meeting with your investor.
About the Author: Mehul Rajput is a CEO of Mindinventory, a prominent mobile app development company. He does blogging as hobby and love to write on mobile technology, app development and mobile app marketing.