Mobile app development is not a solitary task. It needs brainstorming from the entrepreneurs. It needs software development companies to develop unique features and deploy the app in the real market. It requires a targeted audience to leverage the app thoroughly and boost ROI. Above all, it needs investors to make all these happen.   

While building an app, the key challenge you will face is about the “Capital.” It is quite a time-consuming task to fund the development and growth of your app. Looking for investors that believe in your vision is a tough nut to crack. Sometimes it seems impossible as well. 

There are some cunning ways to prepare yourself and create your app idea that convinces investors. You have to assure them that your unique app idea is worth the investment. 

If you are keen to attract app investors towards your app idea and gain their trust, this post will guide you.    

Let’s get going. 

#1. Approach real-world concerns 

If you want to succeed with your app idea, you need to solve some real-world issues people are facing in their day-to-day life. Determine the problems by in-depth research. Clearly describe to your potential stakeholders how your app will solve those issues. Give them some valid reasons to invest in your app.  

#2. Thoroughly assess your app idea 

Only having a mobile app idea will not get the ball rolling. A thorough market analysis is required to identify if there are any similar apps available or your idea is really a unique one. With the research, you can make your software product much better by developing unmatched features.

#3. Acknowledge the right market 

You need to identify your targeted audience before deciding on the app features. Understand your market and perform competitor analysis. It helps to identify what features similar apps are already offering to the audience. So you can figure out potential risks and success opportunities.  

#4. Get to know market size 

After performing competitor analysis, you have an approx idea about the market size you are expecting. Before going to investors, define the target audience as well as market share. It will help you to showcase real figures about the opportunities you are presuming with your app idea. 

#5. Choose a team/development partner 

For the development of advanced mobile apps, you need a development partner or a team with great expertise. It is one of the crucial steps that make or break your app completely. You have to choose developers wisely. Select the one having enough experience in similar project development. You will find a top mobile app development company having professional teams to develop leading-edge features to solve real-life issues. 

#6. Find out fundamentals of investment

If you want to convince potential investors by gaining their trust, you need to understand the fundamentals of running a business and raising funds. It is all about discovering the type of fund you require and the current investment phases.

#7. Make revenue plans

After discovering investment fundamentals, you need to concentrate on the strategies to generate profit/revenue. The more clear your strategy is, the more wholeheartedly investors get convinced. Analyze app monetization tactics such as freemium subscription, in-app advertisements, etc. 

#8. Develop prototype/MVP

Development of MVP or prototype is a winning trick and ensures investors that you are damn serious about making your app a big thing. They also see and interact with your app idea rather than just listening and imagining the scenarios you portray. If you offer an interactive demo experience to your investors, make sure you also represent risk factors coming in your way. 

#9. Rehearse your presentation 

You will not be going to take part in a TED talk, but a presentation in any of the formats needs a high level of preparation and rehearsal. When you rehearse the speech, your confidence will increase day by day and ensure that you are well familiar with your app idea. It also refines your presentation abilities not only with delivering your talk but using visual aids. Try to discuss your material without slides. Assume the question you will face from the investors and be ready to answer it with confidence. 

#10. Create a pitch deck 

Instead of business proposals, use pitch decks to appeal to investors for funding your app idea. Your pitch deck needs to be clear and brief. It should contain a strategy to obtain mobile app users and an estimation for app development expenses. You can follow the tactics of businesses that have successfully raised funds using pitch deck. Keep noticing and encourage yourself for the pitch deck. 

What’s next once your app gets funds?

Once you get funds from the investors, that does not mean you need to stop now. There is always room open for the improvement of the current situation. Once your app launches, improve it and achieve more followers. Keep receiving feedback from your users as well as investors and develop features accordingly. 

As you face different funding stages, you will keep accomplishing new milestones. Then you can pitch bigger inventors for raising more funds. With more funding, you can develop more features, and this cycle keeps going. 

Summing Up

Bringing your app from a thought to reality is a difficult path. But if you are willing to put in all the efforts for the success of your app, you are no longer away from your goal. Once you have the funding, you can keep adding advanced features with the help of mobile app developers. 

Keep in mind that with failure you will learn something new and worth your attention. All you need to do is constant improvements. 

Source: https://bit.ly/3qEswKQ

Google, Microsoft, Alibaba, and Amazon. These names are the inspiration sources for the students, employees, startups, and everyone dreaming to become an entrepreneur. Everyone has their unique startup ideas and wants to bring them to real life. But a basic question that hit them hard is about funding. How and from where to get money? 

Just having a unique idea will not help you to get the ball rolling. It demands thorough planning, commitment, discipline, and obviously money. 

If you are keen on your startup and do not know how to raise funds, this post is for you. 

Different Stages of App Funding

Consider various stages of app startup funding and get into details. 

|1. Pre-Seed Funding/Self-Funding 

Pre-seeding is also called bootstrap. It is a self-starting process of launching an app startup with very little information. You do not have any other support or outside cash. It can only be the savings of the founders. 

This phase is generally not considered among the stages of funding. It is the initial stage where founders work by themselves or with a small group of people. 

As this phase is not included in the funding cycle, we can consider it in the startup cycle.  

Funding: It is up to the entrepreneurs/founders how much money they can make.

Contributors: Entrepreneurs on their own.

|2. Seed Funding/Angel Round  

Seed funding gets raised at the preliminary stage of the app startup. Stakeholders provide a small amount to bring an idea to life. An app startup takes the first step towards market research and MVP development. 

Seed funding generally gets raised from the founder’s personal resources. They also seek help from their friends, family, mentors, and angel investors.  

When angel investors help you, they become limited shareholders of your startup. These shares can be 10% or more than that. 

Funding: Approx $50K to $2M

Contributors: Angel investors, Family, Friends, Mentors, and early-stage VCs.

Company Valuation: At least $3M

|3. Series A Funding

The next step is to launch your working product in the market. Series A funding is the first phase of institutional VC funding. It is necessary to have a plan for the business model development to raise a long-term profit. 

The money raised is used for the two years. It helps with operating costs such as app development, server maintenance, advertising, and other business operational expenses. You can enhance your brand credibility with this funding and grow your business.

Funding: Approx $10M to $30M

Contributors: Angel investors, VCs, and Catalysts.

|4. Series B Funding

When a company has definite success with the Series A funding, it is time to move to the second phase. Usually, the company is already gaining fair profit in the Series B funding. 

Such fundings aids companies to pay salaries, staff expansion, infrastructure enhancement, and establishing it as a pioneering player in the wider world.

Funding: Approx $30M

Contributors: IVP (Institutional Venture Partners, Google Ventures (GV), Late-stage VCs.

Company Valuation: $30M to $60M

|5. Series C Funding and Beyond

It is the third phase of funding companies that have already experienced success in the market. They have definite possibilities in a more extensive market. 

Here the main objective is to enhance company growth. Founders focus on product variation, customer acquisition, and accessing the global markets. 

Plenty of companies leverage Series C funding to enhance their valuation to prospect an IPO. 

Funding: Approx $50M

Contributors: Big banks, hedge funds, public/private equity firms, and Late-stage VCs.

Company Valuation: $100M 

|6. IPO (Initial Public Offering)

When an app startup chooses to get funds from the public (institutional or individual investors) by selling the shares, it is called an IPO. 

Investment bankers decide the price and who will sell the shares. When it is out of stock, then be traded on a stock exchange platform. 

Each country has decided on some criteria for an IPO. It is necessary to follow basic terms and conditions throughout the IPO process. The company has to submit details to security and exchange boards such as financial statements, a purpose for fundraising, etc. 

IPOs usually assist a company to progress and expand in their preferences areas.   

Many startups break down when they go public. So, some of them turned into angel investors and started providing funds to other startups. 

What are the sources to raise money for the app? 

|1. Angel Funding

Angel investors are individual or business entities. They help app startups with the funds at the initial development phase. In return, you need to prove your company shares or convertible securities. 

Family members, mentors, and friends can also become angel investors. Some of the angels take part in crowdfunding and trust foundations. There are various angel investor pools also. They incorporate their money and invest together. 

|2. Bootstrapping 

Bootstrapping is self-funding. You can fund your idea with your own money. So this is one of the secure options because you will not owe anything if you experience failure. 

If you have savings to help with app development costs, self-funding is one of the best and safest options. 

|3. Personal Network 

Individuals in your personal network have faith in your potential. They support you when you choose a new direction without fearing the risks. 

But that does not mean you can survive without planning and a sales speech. However, selling your idea to and convincing familiar people is more comfortable than a complete stranger.  

|4. Private Investors 

Private investors are usually local businesses. They are working in the same sector where your app will perform. You can convince them of your app development funding by improving their business compared to their competitors.  

This option is feasible if your app idea is specifically for any industry niche. You can collaborate with the businesses that have enough funds and want to develop a mobile app for their business. 

|5. App Funding Contests 

Industry leaders, angel investors, and different companies held app funding competitions each year. When you are confident about your app idea and prepared it thoroughly, you can get funds from a contest. 

Participating in contests helps to gain attention to your idea. Sometimes, there are chances to get offers after the competitions. 

|6. VCs (Venture Capitalist) Funding 

Just like angel investors, VCs also offer funding in exchange for company shares. But there are some differences between both of them. 

Angel investors help in the initial stages of the development whereas VCs help when the product is in the development phase. If you need funding on a bigger scale, you can choose VCs. 

|7. Crowdfunding 

There are donation, reward-based, and investment funding when it comes to crowdfunding. It can be performed online via social media contests, incubators, or accelerators. 

Crowdfunding for an app means gaining funds from a pool of investors. Each one of them provides a limited amount. 

|8. Bank Loans

Doors of banks are always open for personal or business loans. It is one of the fastest options for funding. However, you need to keep security while getting funds from the bank. 

Banks do not care if you fail or succeed. They expect the money back after a specific date along with the interests. That is the reason it is not a preferred option for startup ideas. You can choose a bank when you have expanded your business. 

Things to consider before convincing investors 

Concentrate on some of the factors before you expect funds from the people and organizations. 

Summing Up

Whether it’s your personal network, VCs, or angel investors, raising money from the inventors is a tough nut to crack. But with the appropriate planning and proper pitching, it is feasible. 

Keep faith in your idea and start moving towards your goal gradually. You will definitely get enough money to succeed.

Source: https://www.infoguideafrica.com/2021/09/what-are-different-stages-of-app.html