Picture this: You wake up in the middle of the night with the idea of developing an app. You want it to be the next life-changing app in the App Store or Google Play Store. Then you realize that you need money to make this happen. 

Investors are always ready to get in on something they foresee achieving success. With this ultimate guide to funding your mobile app, you’ll be ready to get in front of investors and start bringing your idea to life.

Preparing To Find Investors For Your Mobile App

There’s some work you need to do before you bring your app idea to investors. Having a baseline idea isn’t going to cut it—investors want to know that you have really given this idea some thought. 

They want to see that you’ve done the research to show how it will compare to competitors, or how it will achieve success. There’s a checklist of a few items to consider before bringing your idea to investors. 

Jump to:

• Know Your App's Niche
• Brand Your App
• Develop Your Elevator Pitch
• Create a Pitch Deck
• Create a Demo or MVP

Know Your App’s Niche

Smartphones have been around for quite some time, and it seems like there’s an app for everything. Investors don’t want to fund an idea that already exists. It’s crucial to do your research and figure out the competitive landscape of your app’s market. 

Check out what other apps and companies are offering. Be sure to also take a look at services from other companies in the same industry to ensure your idea is not just a copy-paste of another company’s offering. 

You have to prove to investors that this is a new idea, and that it will provide value. Figure out what specific needs your app is meeting. Ask yourself questions like, “What problem am I solving?” or “What makes this app different and unique?” Investors are going to ask you these questions, amongst many others. They want to ensure that their investment will multiply alongside your app’s success. 

It’s crucial that you do the research to gain a better grasp of your app. Investors don’t want to fund a general idea—they want specifics of who the audience is, what problem it solves, what features your app includes, and so on. It’s crucial that you narrow down your app idea to promote confidence in your investors.

Brand Your App

Now that you know what your app does, it’s time to start branding it. Having a logo or a domain for your app shows investors that you are serious and have put a lot of thought into your vision. Branding helps investors visualize your idea rather than thinking about it in the abstract. 

Branding is at the core of every business; when in doubt, fall back on branding. This is just as true for your app idea because its branding will be the foundation for the rest of the development process. Brand your app with a domain or mockup so investors can visualize your idea to gain a better understanding of what you’re pitching.

Develop Your Elevator Pitch

Investors are busy people, and before they even consider penciling you into their schedule, you need to have an elevator pitch ready. An elevator pitch is a brief, concise description of an idea, product, or company that can be delivered in the time it takes to ride an elevator.

For example: You’re on your way to a business meeting and you take an elevator up to the 21st floor. A potential investor walks in and you strike up a conversation. You have 30 seconds before the elevator door opens and you have to be able to describe your app idea, its features, and the problem that your app solves. This is the hook to getting another meeting where you can go more in-depth about your app. 

Create a Pitch Deck

You’ve given your elevator pitch to an investor and they’re ready to hear more. For your meeting with the investor(s), you’ll have more time to pitch your app, so you’ll need a pitch deck. 

A pitch deck is a presentation to showcase the more specific details and processes of your app. The TV show “Shark Tank” is a great example of how this pitch meeting should go. When creating your pitch deck, don’t put too much fluff that it covers up the key features of your app. A pitch deck is typically a PowerPoint or slideshow presentation, but don’t present the exact script you’ll be using in your meeting. This is a chance to show graphs, stats, branding, etc. to provide visuals with what you’re talking about. After all, the investors can read and would have asked for a transcript if they didn’t want to have an in-person discussion with you.

Take a look at Airbnb's pitch deck from 2008.

Create a Demo or MVP

Much like branding gives investors something to visualize, creating a demo or Minimum Viable Product (MVP) of your app makes your app tangible. Having an MVP shows that you’re serious about making this app the next big thing.

It also gives investors the opportunity to see and interact with your idea, not just listen to you ramble about it. A demo of your app can be a flat mockup or something you’ve already launched. It’s important to note that if you do provide an interactive demo experience, you run the risk of potential bugs and glitches during the presentation. No matter what route you take, investors will be impressed that you’ve put this much thought into bringing your app to life.

Fueled is an app and product development agency that can help bring your app to life by building an MVP before bringing it to investors.

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Types Of Funding For Your App

Now that you’ve fleshed out your idea some more and have a better understanding of the funding process, it’s time to start talking to investors. "Investor" is an overarching term for different individuals interested in supporting your app. Whether they’re family and friends or venture capitalists, they’re considered investors because they are making an investment and holding a stake in your idea. They have faith that your idea could see success and want to be a part of achieving success. So let’s dive into the different types of investors you may encounter.

Jump to:

• Angel/Seed
• Venture Capitalists
• Bootstrapping
• Crowdfunding
• App Contests
• Personal Network

Angel or Seed Funding

Angel (or seed) funding occurs when the app is still in the idea stage. Because you’re asking for funding for an idea that has yet to be materialized, angel funding is harder to receive. 

You have to make a very compelling argument as to why your idea is worth the investment. Do your research so that you are ready to answer almost any type of question. You have to show investors that what you’re pitching is a novel idea that will make a significant industry impact.

Venture Capitalists

Many of the biggest startups take the venture capital route for funding. To be clear, this takes time. You typically already have to be on the ground running to get funding from venture capitalists. This shows that your app has credibility and a stable path moving forward. 

You’ll need to have a compelling pitch and be ready to have your ideas molded by what the investors want. They see success in your idea, but will want to make a few tweaks so they see fast success. Remember, getting funding from venture capitalists takes time; it can happen early in your app’s life or later on after gaining some traction.

Bootstrapping

Bootstrapping is a pretty simple type of funding; you start with your own savings, job income, existing investments, or other personal funds. It’s highly recommended to use your own funds to get started if possible. 

The clear advantage of bootstrapping is that it gives you full control and ownership of the app and the development process. With your own funds, you can build a prototype to validate your idea. Sometimes, bootstrapping is all an app needs to succeed, other times it’s a great way to get your feet on the ground before getting in front of investors.

Crowdfunding

As technology has evolved, crowdfunding has become popular as it occasionally has exponential positive results. Crowdfunding is fundraising through collaborative efforts via the web, but it looks different depending on which route you choose. The three main types of crowdfunding are donation-based, reward-based, and investment funding.

Donation-based funding is pretty cut-and-dry. Sites like GoFundMe allow users to raise money to solve personal issues, like relief for natural disasters, cancer treatments, a house fire, etc. It’s a collaborative effort to raise funds that takes place online. The basic premise of donation-based funding is that it’s a campaign in which donors don’t expect a reward, or benefits in return for their contribution.

Then there are sites like Kickstarter and Indiegogo, which fall under reward-based crowdfunding. Reward-based crowdfunding is typically used by entrepreneurs, inventors, or even filmmakers to raise funds for their development and production efforts. 

In return for their contribution, donors are offered a reward, whether it’s early access to an app, a free product, or having your name in the credits of a film. Though similar to donation-based, reward-based funding is centered around the idea of receiving something of value in return for a donor’s contribution.

The third type of crowdfunding is investment (or equity) funding. In investment funding, entrepreneurs raise money through the sale of securities (shares, debt, revenue share, etc.) of their company. Sounds like venture capital funding, right? The difference is, in investment funding, the entrepreneur raising the capital has total control of what they can sell, how much they offer, and other terms of the agreement. The investors’ job is fairly simple: invest and gain ROI.

App Contests

App contests are run all over the world by business incubators, like Y Combinator. Though extremely competitive, app contests give entrepreneurs an opportunity to present their ideas to investors and business people. Investors and venture capitalists typically judge these contests. 

Funding through app contests is similar to angel funding because the prizes for app contests are funding for an idea. Though your pitch may not win the grand prize, this opportunity still allows you to get your idea in front of investors, and potentially network with them.

Personal Network

Looking within your own personal network is another great way to get initial funding for your app. Friends and family are a great place to start, but make sure to reach out beyond your immediate network. 

Consider weak ties in your network (professors, old coworkers, bosses, etc.) and see if they can help. Even better, see who they know. One of these weak ties likely knows someone who can help or knows someone who can make a referral. When using your own connections, it’s all about networking that could potentially help you go far in bringing your app to life.

Bringing your app from idea to reality is a process. It’s not easy, but if you’re willing to put in the work, you’ll see success. Once you have the funding, you can continue to further develop your app and with the help of a mobile app development agency, your app can reach new levels of success.

Contact Fueled today to turn your app idea into reality.

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