Guide to Find Investors for Your Mobile App

0 views
The Ultimate Guide to Find Investors for Your Mobile App

Have you considered developing a mobile app for your company?

Are you looking for a backer for your app?

To begin, you must undertake preliminary research before pitching your business or app proposal to investors.

Investors want to know that you’ve done your homework on your idea, so having a vague idea won’t suffice.

They also want to see that you’ve researched the market and can show how this will compete with direct competitors or flourish.

Here Are Some Real-World App Funding Options

Once you’ve built your proposal and gained a better grasp of the fund, it’s time to talk to investors – “investor” refers to anyone interested in investing in your app.

Even if they are friends and family or venture capitalists, they are referred known as “investors” since they invest money and partake in your concept.

Furthermore, they feel your point of view will be successful or that you will be a part of that success. So, let’s take a look at the many types of investors you can encounter.

There are various different categories of investors:

  • Personal Connections
  • Entrepreneurial Investor
  • App Funding Competition
  • Angel or Seed Investments
  • CrowdFunding
  • BootStrapping

1. Your own personal network:

If you have a brilliant idea but no access to venture capitalists, try contacting your personal contacts for investment.

For possible investors, your first port of call should be friends, relatives, and people who already trust you: Total annual investment from each sort of investor, on average

The simplest approach to get started is to enlist the aid of family and friends. They already know you, trust you, and have a vested interest in your company’s success as well as their own.

It’s critical that these individuals are committed to assisting you in achieving your goal. A father, for example, can ask his kid whether he can help with development expenditures or marketing.

A brother would most likely prefer to lend money rather than time. If you’re dealing with people who have heard about how successful app developers have become, they may be more interested in the equity they’re putting in than the money.

2. Entrepreneurial Investor:

The phrases “venture capitalist” and “VC” are used to refer to any professional investor who is willing to invest funds in a new company endeavor, usually with the hope of a higher return on investment than the initial investment.

Although venture capital is most frequently associated with startups and high-tech ventures, venture capitalists also invest in a variety of other enterprises.

A venture capital firm is made up of one or more partners that pool their money to invest in a new business, usually in exchange for a share of the company’s ownership.

The partners have typically experienced entrepreneurs or company executives who are in charge of investigating the business strategy and providing useful advice to assure the investment’s success.

In most cases, venture capitalists do not make direct investments in retail enterprises. A limited partner (LP), on the other hand, is an investor in a venture capital fund that has made an indirect investment in many rising companies under the general partner’s management.

In addition to their initial commitment, the LP obtains a portion of the earnings from successful investments, and almost all venture capital firms begin by soliciting money from LPs before attempting to attract funds from other sources.

3. Funding Competition for Apps:

You can enter an app funding contest if you’re an app developer without your own money or access to venture capital.

Appsfunder.com is a forum for app developers where they can obtain advice from other developers and present their ideas to possible investors who will assess whether or not their product is worth funding.

The site includes app pitches as well as source code that is currently available on the market. It’s also a location where app creators may seek advice and comments from professionals in the field.

Types of App Funding Contests:

1. Making a pitch to investors

2. The use of crowdsourcing

  • Kickstarter: A website that allows project creators to propose their ideas and raise funds from individual investors.
  • GoFundMe: This service, like Kickstarter, allows users to raise money for a variety of causes.
  • Indiegogo: Another website that allows people to fundraise for various causes.
  • Challenge for Startups: The Kauffman Foundation hosts an annual event in which the winning team receives a prize of $20,000.
  • Building a Team: A competition that brings people together to create new apps and compete for a prize.

4. Angel or Seed Investments:

An angel investor, also known as a business angel, is a wealthy individual who invests in a new business in exchange for convertible debt or stock ownership. Friends, relatives, and business associates may be part of an angel investor’s network.

The first infusion of funds into a company’s bank account from investors is referred to as a seed round in venture capital.

Seed money is often in the millions of dollars, and it allows a business to get up and running fast without having to wait for later rounds of funding.

You’re searching for a $500,000 initial investment to help fund your startup idea. You can utilize the seed money to create your first prototype and launch a test market for your mobile app, proving the concept.

Before the company is ready to enter its growth stage, it may go through the seed stage numerous times. A start-up business competing in an app fundraising competition will have to raise money several times before producing a viable product.

The following are some steps that will help you secure startup funding.

  • In the absence of any financial or burn rate constraints, explain your concept, approach, and regulations.
  • Make contact with possible buyers prior to meeting with the seed-stage investor.
  • During that time, start an email campaign or ask app developers for thoughts and feedback.
  • By giving statistics, track records, and confirmation elements, you can market yourself to funders for application funding.

5. Crowdfunding:

Crowdfunding is a communal effort of individuals who network and pool their money to support projects launched by others.

Crowdfunding is a method of raising funds for a wide range of initiatives, including independent films, new innovations, and charity organisations.

It can also be used as a direct investment tool to help you fund your app ideas without having to resort to traditional fundraising techniques, which may result in the loss of intellectual property or funding control over your idea.

Sites for Crowdfunding:

  • IndieGoGo: This site is intended to provide a platform for budding businesses to start a crowdfunding campaign.
  • Fundable: Entrepreneurs can use this platform to raise funds for their business ideas.
  • Appbackr: This website provides funding for mobile apps and allows users to download them.
  • WeFunder: Users can invest in startups and small businesses that are looking for cash on this platform.

Mobile App Crowdfunding Sites:

  • Appbackr: In terms of raising funds for app initiatives, this service is similar to RocketHub.
  • Crowdfunder: This platform gives a business plan for an app concept to possible investors. After that, it tells you who has invested and who hasn’t.
  • Circle of Investors: This website allows investors to put money into the ideas of others.
  • Kiva: Individuals can apply for loans using this service, which is funded by peer-to-peer donors.

1. Funding dependent on donations:

It’s a basic but effective method of funding. Users can utilise websites like GiveSmart to raise donations to address specific concerns.

It’s a group effort to gather funds via the internet, whether for major disaster relief or medical treatments, for example.

The underlying assumption behind fundraiser support is that donors do not expect anything in return for their donation.

Indiegogo is one of the different reward-based crowdfunding systems available online. This type of crowdsourcing is used by businesses, entrepreneurs, and even filmmakers to raise funds for their development and marketing efforts.

In exchange for their donation, contributors are given an incentive, such as early access to an application, a point form, or having their names listed in the credits of a film.

Incentive financing, like donation-based fundraising, is founded on the idea of receiving something of actual value in exchange for a donor’s labour.

2. Equity/investment funding:

It’s a different kind of crowdfunding. Entrepreneurs raise capital by selling their company’s securities in exchange for equity. It appears to be similar to a venture capital investment.

A business that raises funds has complete control over what they sell, how much they provide, and other transaction requirements, in addition to investment funding. The investor’s task is straightforward: invest and profit.

6. Bootstrapping:

Bootstrapping is a method of beginning a firm with as little money as feasible by relying on the owners’ time and resources rather than outside finance.

Bootstrapping has been used by several successful businesses, including Costco, Dell Computer, Everlane, and Spanx.

The term ‘bootstrap’ stems from the idea of pulling oneself up by one’s bootstraps with one’s own boots.

Bootstrapping has one indisputable advantage: you have complete control over the application and workflow. Furthermore, you could, at the absolute least, construct an MVP using your money to test your concept.

Often, all that is required for an application to succeed is bootstrapping. Finally, it’s a lovely way to get your hands filthy before meeting with potential investors.

Before you propose your idea to investors, there are a few things you should do.

Understand the Market for Your App

Because mobile phones have been around for so long, it appears that there is an app for practically everything. Investors, on the other hand, are unwilling to invest in a pre-existing app concept.

As a result, conducting competitive research on the demographics and target audience of the market for your app is critical.

Take a look at what other apps and businesses have to offer. Check out what other companies in the same market are doing to make sure your idea isn’t just a glorified version of what they’re doing.

You must show investors that it is a fresh notion that is used in our daily lives.

Second, figure out what specific need your software is addressing. “What problem are we trying to solve?” “What makes this application unique and excellent in contrast to __?” or “What makes this application unique and exceptional in comparison to __?” are some topics to discuss beforehand.

These are just a few of the questions funders may ask, and there are plenty more.

They’d like to believe that the money they’re putting in will be compounded by the success of your app.

You must perform research and analysis in order to gain a deeper understanding of your app. Investors are hesitant to put money into a wide concept.

Instead, they want to know who your target market is, what difficulties you’ll be addressing, what features your app offers, and what data you’ll be collecting.

Scale your concept to the point where investors can be confident in their investment.

Promote Your App

Because you now understand how to utilize the app, it’s time for us to start marketing it. Creating a logo or a domain name for your app demonstrates to investors that you are serious about your app concept and have given it considerable thought.

Instead of leaving your product as a vague idea, investors will be able to visualize it through marketing. Marketing has always been at the heart of any organization; rely on marketing when things are uncertain.

This appears to be true for your app concept, as its marketing will be the foundation for the rest of the project’s development.

Market your project, whether it’s a domain name, a website prototype, or an app prototype, so funders can see your concept and understand what you’re pitching to them.

Develop a Sales Pitch

Investors are busy people, so you’ll need a sales pitch before they’ll even consider meeting with you—your company’s sales pitch, comparable to a personalized interview. A networking event, for example, is the best approach to meet funders.

Let’s take a quick look at what a sales pitch is.

Your application’s sales pitch is a brief and succinct summary of it. Take the elevator to the 30th floor, for example, on your way to a client meeting.

You begin a conversation with a potential investor who enters the lift. The lift door opens in about a second, and you step out to your client.

You just have a few seconds to demonstrate your app’s concept, functionality, and the problem it solves.

That’s the catch: you’ll have to make another appointment to look over your application for further information and other details about the project.

If you can’t explain your app in under a minute, you should do some more research.

You should provide enough information about your app to entice investors without taking up too much of their time.

Once they’ve expressed interest, you’ll have more time ahead of time to meet and discuss more specific issues, such as budget allocation, functionality, and so on.

You’ve given an investor your pitch, and they’re interested in learning more. During your presentation, you may have more than a few seconds to describe your application to the investors; hence, you will need a business plan.

A business plan is a dialogue that outlines the most important features and workflows of your app.

Avoid using fillers in your business plan that detract from the app’s core value. A business plan is typically managed in the same way that a Powerpoint presentation is. It does not, however, include any explicit content that you will utilise in your presentation.

This appears to be a chance to provide statistics, facts, logos, and other visual representations of what you’re talking about.

If the investors didn’t want to meet you in person, they could understand and would have requested a copy.

Create a Prototype/MVP

Developing a demonstration or prototype, similar to how marketing aids investors in envisioning, makes your software accessible. Having a minimal viable product shows that you’re serious about making this app the next big thing.

It also allows investors to become hands-on with your concept rather than just listening to you speak. Your app prototype could be a simple draught or something you’ve already deployed.

When giving an experience prototype session, it’s critical to remember to pay attention to evident defects and concerns. Regardless of the road you take, investors will be delighted that you’ve put so much effort into making your application a reality.

Work with Next Big Technology Infotech to produce a stunning Prototype or MVP to demonstrate your app ideas to investors.

The stages of fundraising are a method of raising funds from potential investors.

There are typically five stages that firms go through as they prepare for public or venture capital investment.

For the corporation, each level presents an opportunity for feedback, marketing, and media excitement. If their product isn’t worth investing in, they’ll find out early on and can make changes to their product or business.

The best way to raise funds depends on where you are in the fundraising process. An investor would need to know what they are investing for before they began.

The following are the stages of fundraising:

  • Round of pre-seeding
  • round of seeds
  • A-series
  • B-Series
  • Beyond the letter C

Round of pre-seeding

A pre-seed round is when a company is only getting started and hasn’t even considered raising funds.

It’s a round of funding that takes place before the seed stage, and it’s typically used to establish a company’s product or service.

Investments in this stage are typically small, ranging from $100K to $500K. Investors are expected to back startups in the seed and early stages of development.

The pre-seed round is for startups that are just getting started and haven’t yet developed a product or service.

They may have an idea, but they will need to provide additional details in order for others to contribute. The first thing they’d do is try to secure a patent so that no one else may steal their idea and start a competing company.

They would design a product or service if they had a company strategy but no actual product or service to present to potential investors.

This stage’s goal is to raise $500K to $1 million, depending on the market for their product or service.

Round Seeds

Angel investors and venture capitalists are likely to invest in seed rounds.

The seed round is when a firm expands its size for the first time when it begins market research and hires professional consultants and organizations.

They’ll hunt for investors at this point because it’s the first time they’ll require a large sum of money to move their company forward.

Depending on the company, investors can expect a 30 percent to 50 percent return on their investment. If the company fails, they lose money.

Because most investors invest in companies with a high level of risk, the expected return may be higher.

Seed Round has a few basic requirements:

  • research into the market
  • A strategy that lays out what you’re going to do with the money.
  • Revenues forecasted based on the target market

Following seed funding, you can raise Series A, B, and C rounds of funding from renowned venture capitalists.

This might add up to tens of millions of dollars in the long run:

Series A, B, and C are the next stages, in which enterprises have a more established product or service.

They’ve already gone through the previous phases of fundraising, so they only need a little amount of money to promote their company to accredited venture capitalists, angel investors, and other private equity firms.

‘A’ series

Series A firms are the first to be regarded as serious endeavours by investors, which means they have already produced a product and are selling it, or they have offered services.

Accredited investors, such as venture capitalists or angel investors, would be required to spend $1 million to $3 million at this level.

Why do businesses require so much cash?

Companies need so much money because they want to hire more people and possibly outsource their operations. This money will go toward marketing, advertising, and media hype.

Because the company is already established in series A, angel investors can expect a return of 38 percent to 50 percent.

B’ Series

When a company has already developed a product or service and is looking to expand, it enters Series B.

In order to finance $3 million to $10 million, they will go to private equity firms, venture capitalists, or family offices.

The goal is to increase customer acquisition and corporate investment so that the company can start growing out globally, acquiring other companies, developing alliances with other organizations, and even starting an accelerator or incubator to help entrepreneurs.

A corporation may raise this amount of money if they wanted to buy other businesses, improve their products and services, and extend their target market in order to increase their advertising budget.

Because the company has already established itself in series B and is profitable, angel investors can expect a return of 38 percent to 50 percent.

‘C’ Series

Series C financing is used when a company needs a large sum of money to expand and strengthen its operations on a global scale.

Accredited investors, such as venture capitalists or private equity firms, would be needed at this stage, which would require $5 million to $15 million.

They would typically receive this amount of money because they want to use private equity firms to purchase other companies, expand their business abroad, enhance their international advertising budget, and hire experienced management.

Because the company has grown into a global business, angel investors should expect a 25 percent to 30 percent return. Still, before investing so much money, they want to see how well it performs on a worldwide scale.

Information Supplementary

Time spent building an app on average:

  • A $50,000–$200,000 iOS (Apple) app should take 2–3 months to develop.
  • At a cost of $25,000 to $75,000, an Android app should take 2-4 months to develop.
  • The development of a Windows Phone app should take 2–3 months and cost $10,000–$40,000.
  • A third-party platform, such as Blackberry, should take 3–4 months and cost between $15,000 and $60,000.

Factors that influence app success include:

A mobile app must achieve or even surpass the following criteria in order to be successful:

1. Earnings:

A successful app can provide transactional, recurring, and passive money for the creator. Groupon, LinkedIn, Dropbox, and Uber are examples of successful apps that meet all three criteria.

2. Clientele:

In order for the app to succeed, users must be able to quickly download and use it without encountering any user issues.

3. Customer Reaction:

Customers should provide feedback on the app to ensure that they are happy with it and want to keep using it – even promoting it to others (word-of-mouth).

4. Development & Maintenance Ease:

The software must be designed in a user-friendly and easy-to-understand manner.

5. Responsive to mobile devices:

To reach the widest possible audience, the app must be easily accessible from any mobile device.

6. Competitive Benefit:

By offering something new or giving a superior user experience, an app should have a competitive advantage over other apps.

7. Trustworthiness:

By previewing the app store and allowing users to read reviews of the app or watch YouTube videos about it before installing, an app may establish credibility and provide value to customers.

8. Feedback from Customers:

This will aid in increasing downloads and assisting clients in making an informed purchase.

Channels for App Distribution:

1. Go to the website

A website can be a useful tool for promoting an app concept, but it has limitations. Rather than visiting a website, more people choose to download apps from the app store on their mobile devices.

2. Most Popular Channels:

Google Play, Apple App Store, BlackBerry App World, and Windows Phone Store are the most popular distribution channels.

3. Apps for a fee

Users can download apps for free if they are willing to wait a specific period of time (usually a day or two) before they can use them. Otherwise, customers can make a one-time payment of $1 to $5 using their mobile device.

4. Apps that are completely free

Users can download an app for free and utilize it with limited functionality until they opt to upgrade.

5. Upgrades for a fee

In order to acquire greater features, users can download a paid-upgraded version of the program.

6. Purchases made within the app

Micropayments can be used to earn revenue for developers that create a free app with in-app purchases.

7. Apps that are available for free

A freemium program can be downloaded for free, but certain features are only available if the user pays a charge.

Conclusion:

Next Big Technology is a seasoned mobile app development firm with a track record of creating top-performing apps for iOS and Android, launching them successfully, and monetizing them.

We provide a full range of services, from brainstorming to launching your app on the market.

We have a team of skilled designers and programmers who know how to make an app that will become one of the most popular in its category.

 



    Next Big Technology