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In today’s dynamic digital landscape, turning a groundbreaking app idea into a reality often requires securing investments from dedicated app investors. These financial backers play a crucial role in propelling innovative concepts into successful ventures. If you’re an aspiring app entrepreneur seeking to attract investors, understanding the process from an investor’s perspective is paramount.
How to get mobile app investors?
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.
Are you all set to look out for mobile app investors?
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 spread a word for mobile app 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.
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 and get app funding.
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 fund raising 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.
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.
What are the different types of Investors?
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 raising money from big groups of people through social media platforms. Building a successful crowdfunding campaign requires a detailed and well-executed promotional plan. It involves setting clear goals and objectives, knowing your target audience, crafting a compelling campaign story, choosing the right crowdfunding platform, and implementing a multi-channel marketing strategy.
Leveraging personal networks, implementing a timeline and milestones, and monitoring and adapting your strategy are also crucial. Providing regular updates and engaging with supporters during and after the campaign helps maintain momentum and build long-term relationships. By following these steps, you can maximize your chances of success in raising funds and achieving your crowdfunding goals.
Angel Funding
Angel investors are indeed influential figures in the world of startup funding, providing capital to promising entrepreneurs in exchange for equity in their companies. However, securing funding from angel investors requires thorough preparation and a strong foundation for your mobile app startup idea.
Before approaching angel investors, it is crucial to develop a flawless strategic plan that outlines the critical elements of your mobile app startup. This plan should encompass various aspects, including a detailed description of your app, its unique selling proposition, target market analysis, and competitive landscape assessment. The strategic plan should clearly communicate your vision, mission, and long-term objectives for the mobile app startup.
Venture Capital Firms
During the expansion stage, startups often require significant financial resources to scale their operations, develop new products or services, and capture a larger market share. Venture capital firms play a crucial role in this phase by providing the necessary funding in exchange for equity ownership in the startup.
Venture capital firms are specialized investment entities that focus on financing high-potential startups to achieve substantial returns on their investments. These firms typically consist of professional investors who have expertise in evaluating business models, market potential, and growth strategies. They conduct thorough due diligence on startups before deciding to invest, considering factors such as the team’s capabilities, market opportunity, competitive landscape, and potential for profitability.
Funding Contests
Participating in app funding tournaments provides startups with a valuable opportunity to pitch their initial app concept to potential funders. To increase the likelihood of securing funding, it is crucial to have a comprehensive marketing strategy and a minimum viable product (MVP) in place.
A well-crafted marketing strategy should involve thorough market research, a unique selling proposition (USP) that differentiates the app from competitors, effective branding and positioning, a user acquisition strategy, a monetization plan, and a pricing structure. Simultaneously, an MVP demonstrates the app’s core functionality and value proposition, allowing funders to visualize its potential impact. Presenting a compelling pitch with a strong emphasis on the app’s value proposition, market opportunity, business model, marketing strategy, and the team behind it is vital.
Conclusion
Recap of Key Points
Securing app investors requires a multifaceted approach. From crafting a compelling pitch to addressing concerns and showcasing growth potential, each step contributes to a successful investment journey.
Encouragement for Aspiring App Entrepreneurs
Navigating the investor landscape may seem daunting, but with dedication and a strategic approach, turning your app idea into a reality is within reach. Stay focused, adapt to feedback, and keep refining your pitch.
However, if you’re still in doubt about where to start, then, don’t worry! With a skilled team of developers specializing in different technologies and industries, GML Soft Labs can help accelerate the process of turning your startup app idea into a successful product. So, don’t wait! Get in touch with us today!
FAQs
- How crucial is a prototype when seeking app investors? A prototype is highly crucial as it provides a tangible representation of your app, demonstrating your commitment and vision to potential investors.
- What are some effective user acquisition tactics? Proven tactics include targeted marketing, referral programs, and collaborations to ensure sustainable and scalable user growth.
- How can entrepreneurs showcase their app’s success potential? Demonstrating a clear plan for not just acquiring users but retaining them and expanding the app’s reach showcases its growth potential.
- How often should entrepreneurs update investors on their app’s progress? Regular updates, preferably monthly, help maintain transparency and build a collaborative relationship with investors.
- What role does networking play in attracting app investors? Networking is crucial for building relationships with potential investors and gaining visibility within the app development community.
