How to get Investors for an App Idea?

Just imagine…

You wake up during the night with the desire to create an application….an application that could take the digital world by storm! But, suddenly you realize that you’re going to require funds to achieve this goal. So, what are the next steps, and how to get an investor to bring your brilliant idea to life?

Well, with 88% of mobile time spent on applications, no wonder why a growing number of businesses are expressing a significant desire to invest in the development of mobile applications.

However, having a groundbreaking app idea for your startup seems to be no longer sufficient. The process of developing a startup application idea into an effective product necessitates a substantial investment of money, time, and specialized resources.

Well, investors are often willing to invest their funds into anything they believe will thrive. It’s totally achievable, but it does require some commitment. Therefore, with this comprehensive guide to financing your mobile app startup, you’ll surely be prepared to attract new investors and begin the journey of turning your vision into a reality.

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Table of Contents

Are you all set to finding an App idea Investor?

To-do Items before you look-out for App Idea Investors

Funding Rounds: What exactly are they?

Stages of Fundraising

Types of Investors for your Startup App

What to do when your App is Funded?

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Are you all set to find an App Idea Investor?

So, before you present your startup app plan to investors, you should do some background study.

Before approaching investors, you should know that most investors look for more than just great app ideas to put their money into any business. Their main motive is to know that you’ve conducted an extensive study on your concept. Therefore, having a rough understanding of your idea may not be enough.

Furthermore, they want you to analyze the market well enough so that you can explain how this will compete with key rivals and flourish. So, here’s a checklist of a few to-do items before you bring your awesome idea to potential investors.

To-do Items before you look-out for App Idea Investors

• Know your App’s market
• Branding
• Elevator Pitch
• Pitch Deck
• Create an MVP (Minimum Viable Product)

Know your App’s Market

Considering the existence of smartphones for so long, it appears like there is an app for anything and everything. Therefore, investors are hesitant to invest in a pre-existing app idea. So, you must research to understand the competition in your app’s niche.

Explore what all the other apps and enterprises have to offer and check out their offerings to confirm your concept isn’t just a replica of another company’s idea. You must convince your potential investors that this is a revolutionary idea and will have a substantial influence in the digital world.

Also, consider asking yourself questions like, “What problem am I solving?” or “What differentiates this app from other competitors?” These are some of the concerns that investors will ask you, among other things. Therefore, you should be prepared enough to answer these queries with confidence.

Branding your Application

Now that you understand what your application should do, you can initiate labeling it. Developing a logo for your application displays to investors that you’re passionate about your application’s concept and have poured a lot of thinking into it. Branding allows the investors to envision your concept rather than just think about it.

This is also applicable to your app concept, as branding will set the tone for the remainder of the development phase. Brand your project with a domain, a prototype of a site, or a model of the app so investors can picture your idea and acquire a better grasp of what you’re proposing to them.

Also Read: Mobile App Development Trends

Elevator Pitch

Investors are incredibly busy folks, and you must have an elevator pitch prepared well in advance before they consider scheduling a call with you.

But, what exactly is an elevator pitch?

Well, an elevator pitch is a brief overview of your company and an idea about your startup app. Therefore, this pitch can be your chance to establish a genuine connection with your potential investor that you can leverage afterward. It isn’t always necessary, however, you still should be equipped for every circumstance in which you could be asked to deliver an elevator pitch.

If you can’t explain your app’s concept clearly within a 30 seconds time frame, then you should certainly conduct some extensive research. Therefore, you should be capable of describing your app properly to entice investors while also not occupying enough of their time.

Pitch Deck

A solid pitch deck shows that you’re quite serious about your startup app and you’ve given serious thought to your idea. In the pitch deck, investors would like to see certain key elements such as –

⦁ Target market
⦁ Application model
⦁ SWOT analysis
⦁ Return on investment
⦁ Marketing plans and goals
⦁ Potential risks, obstacles, and challenges (how you will deal with them)

Create an MVP (Minimum Viable Product)

Creating a prototype or an identical version of the app with a minimal amount of features assists investors in imagining your app’s concept effectively. Having a minimal viable product shows your commitment to making this app the next big thing.

Furthermore, it allows investors to get on board and experience your vision rather than merely hearing your presentation. If you get a chance to provide an immersive experience, you must consider bringing future challenges and concerns to light. Then, regardless of whatever road you take, investors will be pleased that you’ve put in so much effort to bring your startup application concept to life.

Ways to get App Idea Investors?

Are you still in a dilemma about attracting prospective investors for your mobile app startup? Worry not! Here is a comprehensive list of crucial points to onboard the best investors for your mobile app idea.

So, peep into it to find your gem source!

• App Idea Funding Contests
• Drawing the attention of Angel Investors
• Personal Networking
• Reaching out to Private Investors
• Launching Crowdfunding Campaigns
• Onboarding Co-founders

App Idea Funding Contests

If you’re confident enough of the groundbreaking potential of your idea, you can easily acquire funds for your app idea by participating in one of the funding contests. These contests are sponsored every year by leading organizations, and angel investors, among other enterprises. Some of these contests merely provide funds, while others additionally offer guidance. 

But, if you are going to enter such a funding contest, you must meticulously plan for it. The reason is that gaining funds for an app through a contest implies you will have to face tough opponents, often up to a thousand of them. However, participating in a challenge, on the other hand, can be a nice opportunity and a means to bring more attention to your concept even if you don’t succeed.

Drawing the attention of Angel Investors

Now comes the second option that most app startups are fascinated by and this is, Angel investors.

Angel investors are often people – and occasionally businesses – who use personal assets to assist enterprises in their early phases of development. Indeed, you won’t have to pay back the funds that angel investors grant you if your concept fails. This is what drives the majority of entrepreneurs to seek out angel investors.

But, if your idea survives and flourishes, your ‘angel investor’ will definitely own a stake in your company. Angels often ask between 10% to 30% of your shares, contingent upon the sum of money they grant you. This implies they’ll have some say over your company and will be eligible for a portion of your profits.

Angel investors take high risks in supporting mobile app entrepreneurs, that’s why pitching your idea to them might be a little difficult. Yet, if you can accomplish that and are okay with providing shares to a 3rd party, angel financing for an app can help your mobile app startup grow quickly.

Personal Networking

Family is often one of the most dependable financial supports preceded by friends. Individuals in your social circle have faith in your capabilities and encourage you to the fullest when you choose to embark on a risky path. 

However, this does not mean that you don’t need a strong strategy and a strong pitching speech to convince them to provide you with funding. 

But the best part is that convincing individuals you know is simpler than pitching your concept to a random person. Moreover, funding your mobile app concept through a personal network helps you cross all the hurdles with smaller and less expensive initiatives.

Reaching out to Private Investors

Private investors are the next solution on our lineup of mobile app funding sources. They are frequently local enterprises that operate in the industry that your app will target. Just imagine that you have a novel idea for salon bookings. Therefore, you can pitch it to local salon owners and convince them to support the creation of an app to get a competitive advantage.

This is an excellent alternative if your concept matches a specific niche as you have means of getting in touch with firms that have the finances to invest in an app but don’t have an app for their own business. In this instance, there is a good chance that you might get funding for your mobile app startup idea.

Launching Crowdfunding Campaigns

You will build a far larger circle of individuals in your type of concept by using crowdfunding platforms. Your name and business will reach plenty more prospective investors as a result of networking, leading to increased earnings.

Word-of-mouth marketing and having a few outstanding applications in your repertoire can be the cornerstones of your accomplishment as a startup owner. If you do not already have a reliable community of supporters, now is the time to start creating one with crowdfunding.

Onboarding Co-founders

Another strategy to attract funding is to persuade relatives and friends with solid financial backgrounds to represent you as co-founders. This happens only when they are confident about your app’s revenue-generating capabilities. 

Moreover, some innovators only choose to fund the early stages of their venture by bringing in a co-founder. Well, in our opinion, this is a good strategy as the co-founder not only handles the intricate work that must be put into launching a new app but also provides the funding that you need to skyrocket your app idea.

However, persuading individuals to invest in your idea when you’re just getting started is a bit difficult, which is why it’s completely acceptable to put in some of your own money to get your project started. These initial funds can be used to engage designers to build prototypes for your app, which can then be used to pitch investors for more funding.

Funding Rounds: What exactly are they?

Once you’ve sorted out the glitches in your app concept, you’re almost ready to present it to investors. Most startups go through various fundraising stages, and it’s crucial to recognize what these fundraising iterations mean for your organization.

With every funding round, you’ll meet new investors with diverse objectives for where they would like to invest their funds. As advancements are made, these funding rounds enable your startup app to undergo several modifications and milestones.

Stages of Fundraising

• Pre-Seed
• Seed
• Series A
• Series B, C, and beyond

Pre-seed

A pre-seed phase is when a company is only setting up the business and hasn’t even considered raising money.

It is a funding round that occurs before the seed stage and is frequently utilized to build a company’s product.

Typically, investments at this level are relatively small. Investors are required to help companies during their seed and first series of investments.

Also Read: Tips to Increase App Engagement

Seed

This is when things really take a turn and entrepreneurs start to pull in the funding they need to thrive.

This round is aimed at your startup’s early development, therefore total funding can vary between $1 million and $2 million. Angel investors, early-stage venture capitalists, and startup incubators are usually the investors of this round who see the value of your startup and are ready to take a chance.

Series A

If you’ve made it to the Series A round of fundraising, you’re on the right track. At this point, you should be putting your efforts into the advancement of your company and product. Series A funding enables you to focus on scaling your business and product, as well as advertising strategies. Venture capital firms, “super” angel investors, and large corporations are common Series A investors, with total investments ranging from $2 million to $15 million.

Series B, C, and beyond

Getting to Series B and further is a massive accomplishment for your startup. Series B focuses solely on building and expanding your business’s future, which could include worldwide efforts or team growth.

Series B investments from venture capitalists and potential corporate investors average $24.9 million. Any further investment rounds will be focused on taking your firm public, exploring strategic partnerships with other businesses, or extending into other sectors.

Types of Investors for your Startup App

Now that you’ve fleshed out your app’s concept and have a better understanding of the funding process, it’s time to start talking to investors. So let’s dive into the different types of investors you could approach to fund your app.

• Crowdfunding
• Angel Funding
• Venture Capital Firms
• Funding contests

Crowdfunding

Crowdfunding is a method of raising money from big groups of people through social media platforms. To be successful with your fundraising campaign, you must build a good promotional plan that necessitates time, effort, and money.

Angel Funding

Angel investors are powerful investors who fund potential startups in exchange for shares in the company.

So, before seeking angel investors, make sure you have a flawless strategic plan and demonstration of the market sustainability of your mobile app startup idea.

Venture Capital Firms

In exchange for a share, venture capital firms lend money to startups with tremendous potential for development. The highest cheques are written by venture capital firms to achieve a substantial return on investment.

As venture capital firms work for major corporations and can give substantial amounts of money, it is ideal to collect funds from them during the expansion stage.

Funding Contests

You can also enter various app funding tournaments organized around the globe for startups to pitch their initial startup app concept to funders.

If you are given the chance make sure you have a robust marketing strategy as well as an MVP to maximize your chances of securing funding for your concept.

What to do when your App is Funded?

When it comes to raising funds for your mobile app startup, it’s critical to understand the various sorts of investors you could pursue and at what stage. We tried our best to provide a quick brief of some typical forms of investors and stages to finance your mobile app in this blog.

However, if you’re still in doubt about where to start, then, don’t worry! With a skilled team of 100+ developers specializing in different technologies and industries, Antino Labs can help accelerate the process to turn your startup app idea into a successful product. So, don’t wait! Get in touch with us today!

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