Developing an innovative mobile app, in reality, takes more than an idea. Investing in the project is equally important. Developing products, marketing, conducting market research all of these require investment. Having the appropriate funds and being willing to risk them solves the problem. If not, how? You must go to investors for funding. 

As you can imagine, this task is not easy. In the first place, it is not just you who wants to see your startup funded. Additionally, nobody likes wasting money (including rich entrepreneurs). Consider your strategy carefully before moving forward. Our article is a good place to start. Let’s learn how to obtain investors for a mobile app startup idea.

An Overview Of Types Of Investors For A Startup

You can get investors for mobile apps in various ways on the market. Based on your app idea, funding need, and stage, you should look for funding in different places and approach them differently. Let’s explore the types of investors for a startup you might encounter.

1. Family and Friends

 The easiest crowd to convince to develop your app idea is the people closest to you. Normally, your family and friends can only offer support at the beginning of a startup. Research the market using this money and create a prototype to show potential investors. If you want to go further, you should consider other options, too.

2. Co-founders

 Invite your family or friends to join the company as co-founders. Investing in your project is likely when a person believes your idea has potential. If you trust people outside your circle, you can also get them to help you start your business. 

3. Contests for Apps

Different countries hold app contests across the globe. These competitions give entrepreneurs a chance to show investors their app idea to convince them to invest in it.

4. Crowdfunding

 This form of fundraising relies on collective efforts online and through other networks. Crowdfunding campaigns are difficult to run with little time, effort, or marketing funds. 

5. Venture Capitalists and Angel Investors

If your mobile app startup needs serious investment, start looking for venture capitalists and angel investors. Most of them will offer a large amount of cash. 

The top investors in app development are usually individuals. On the other hand, venture capitalists are typically companies. To get investors for a mobile app, you need to show that your idea deserves their attention. 

Funding Stages For Startups

Pre-Seed

In a typical bootstrapping scenario, private networks fund the startup. You are developing and evaluating your idea at the beginning of your startup. In this stage, a portion of the funding goes toward market research before the pitch presentation.

If there is sufficient funding, it is possible to build a prototype at the pre-seed stage. Startup companies pop up like mushrooms, and many require funding for mobile applications. The scenario has created a highly competitive market. When you offer a lot more than an idea and initial calculations, it increases your chances of acquiring investors for a startup.

Seed

The first stage of funding comes from substantial sources. You need money beyond your savings, and your network can provide. The pre-seed stage can attract angel investors, but they usually show up during the seed stage. 

Recent reports have indicated the presence of venture capital firms as well. You should allocate funds from the seed stage, at the very least, towards growing your mobile app development team with more experienced professionals. 

A seed-stage idea becomes valid after the minimum viable product (MVP) development. As soon as the MVP is ready, make it available to the general public and investors. At the seed stage, your idea is most likely to generate revenue.

Series A

The active growth of a startup begins with Series A funding. Thus, venture capital makes sense at this stage of the process – on top of that, firms investing in venture capital often invest in mobile app development startups with high growth potential. Series A is the first stage in venture capital, where investors face the most risks. A strong elevator pitch will help you get funding at this stage. Once it passes this stage, it will have a greater probability of success.

Series B 

Series A suffers the most from a drop in survivorship. If your app has reached Series B, it is likely to succeed. However, mistakes do happen, so don’t take this for granted. Series B funding allows you to expand your business faster. The value of your shares increases at this time, enabling you to sell fewer shares to venture capitalists. In addition, you retain ownership of your company.

Series C 

Your business is most certainly alive if it is still operating at this stage. In other words, you make enough money from your business to cover your expenses without requesting additional funding. After Series B funding, each stage targets large-scale expansion, substantial improvements, and more.

How To Find Investors For Mobile App Project?

Approximately 75% of startups fail as investors only fund selected projects. Investors must believe the money will be worth it. To increase your chances of success, plan for a meeting with potential investors.

1. Determine The Type

To start, figure out how you will attract an investor for a mobile app project. Are venture funds a good option? What about angel investors? Would a contest be a suitable option? Answer these questions and other similar ones carefully. Determine the approximate cost of the mobile app development before approaching investors. A successful startup founder will pitch the investor only if they know the budget of the app.

2. Analyze The Situation Thoroughly

A new app idea comes to you, and you recognize the prospects. Unfortunately, the investor doesn’t share those same beliefs. Prepare yourself to convince him with the project statistics. Analyze the products of your competitors and why they are unsuitable for success. Therefore, it is easier to explain how your solution is better than others. 

3. Manage Your Brand

App investors are looking for companies that have a favorable image. Having a strong brand is important. The company’s identity includes the logo, color scheme, and even its philosophy. Your brand should flow naturally into a product. Investors are better able to visualize your idea with branding.

4. Engage In Marketing Activities

How soon will you begin marketing activities? After your product launch? It’s a risky approach. Start your promotion early, for the following reasons: 

  • Consider testing your idea with potential users 
  • Find potential clients;
  • Reach out to interested investors 

What Are Investors Looking For In Mobile Apps?

  • Enthusiasm. 

A mobile app development startup’s success depends in many ways on its founder, who is its driving force. Prepare yourself with enthusiasm for your project and be prepared for hard work.

  • Know The Market Thoroughly. 

As the initiator of the whole venture, you should have a good understanding of your market, its key players (your competitors), and other relevant indicators (such as the number of potential users interested in the product).

  • Your Unique Selling Point. 

Every day, almost every investor studies a large number of startups. What makes you and your team stand out? Think creatively! Make your project memorable! If you succeed in doing so, you will be more likely to obtain investment for your app.

  • Keywords 

Make sure you understand the exact meaning of buzzwords and have a fairly good understanding of their meaning. Make it clear that your product does not utilize blockchain or machine learning mechanisms. If the lie persists, the truth will eventually emerge.

  • Economic Forecast. 

The audit will ask for all financial indicators to determine your company’s prospects. Be prepared to list your customer acquisition cost as well.

  • Be Professional

A potential investor should realize that your team consists of professionals and enthusiasts. Make sure to hire experienced specialists with extensive expertise.

Summary

Improvement is possible at any time. The saying fits well with apps. If you get funding, your work does not end. Ensure you launch new features, making the app more engaging, and expanding for better investment opportunities. Having an experienced app development company will help you create a captivating app. We offer a range of services ranging from mobile app development to custom software solutions. 

FAQs

What is the funding process for mobile apps?

Fundraising
contributions
Contests for funding and app contests
Seed funding
Bank Loans

What are some ways to start an app without money?

Develop your app with the help of an outside contractor
Generate revenue for investors
Split the revenue with your developer
Develop your proof-of-concept
App through funding contests

What is the funding requirement for an app?

A mobile app can cost over $10,000. If you want high-end technology and features, the price will increase. If you are looking for ways to fund your app, we have outlined the steps of the entire process, along with tips on how to approach potential investors.