Securing funds for any new venture is an uphill battle, but when the investment is an app, a little more effort is required to sell this elusive, intangible concept. It takes a sophisticated kind of investor to enter this industry, but despite the overcrowded marketplace, there are great returns to be made, and thus investors ready to be a part of it. In amongst the technical translations and prototyping, the responsibility of raising funds doesn’t always get the time and dedication it deserves. Let’s discuss the route many app designers take to secure funds, and considerations to take.
Bring your app developers in-house
Your app developer really is the all-mighty creator from start to finish, despite the experienced heads that you might have working on this project. If you are conceptualizing in-house and planning to use an app developer ad-hoc when required, you might need to add more of a buffer than you expect to make this arrangement worthwhile. A more economical solution would be to bring your app developers in on a salary and use the consulting fee excess on other areas that needed fundraising.
Find business partners and investors
Seeking funds periodically can be very exhaustive, especially when the alternative can be to find a business partner or sophisticated investor that can seed your app indefinitely and allow you to scale faster without having to go to another round of capital raising soon after the last one. By choosing the right partner or investor, you can actually access their wisdom and connections, which might even be of more worth to you than the financial boost itself.
Before you start to engage these individuals and entertain these negotiations, you need to get your ducks in a row. Sophisticated investors have many options, and just because you know that your app is a killer idea, doesn’t mean they will take you at your word. They want to see concepts and research that supports your hypothesis, so don’t enter a discussion without these behind you as you likely won’t get a second meeting.
Consider an app contest
Many developers will turn their nose up at app contests and competitions, but there is a lot to gain by taking this route. Not only do you enter an arena with some of the smartest minds in the industry, but you also get access to the investors and businesses who are looking to invest in the right option. You will also garner quite a bit of publicity, especially if you are successful and get through to final rounds.
You don’t need to enter with the view of meeting all your financial goals but look at this opportunity through the lens of a platform where you can communicate your concept to a wider audience, and get some experience rubbing the shoulders with some of the leaders in the app space. Getting an award for your app is sure to turn a few heads, and might just be the publicity you need to get funding over the line.
Consider grants and crowdfunding
Over the last few years, there have been an influx of small business grants that are designed to support ideas and see innovators bring their concepts to life. Facebook has just recently launched a suite of small business grants, and not enough app developers are taking the time to do their research and see what options are available to them. There are also government bodies who are incentivizing businesses and startups if their pursuits have a positive environmental or societal impact, so take a look at your offering and see if you can meet these requirements.
Another option is of course crowdfunding. While nothing is assured by taking this path, it is a smart way to market your app idea at the same time as securing vital funds. This approach works particularly well if you are targeting a niche or solving a problem that afflicts the masses – so you can’t really go wrong. Before you throw up your idea, however, make sure you have done your due diligence with copyrighting your app as you are essentially going to be spelling out your app design to anyone who stumbles onto these highly visited pages.
The truth is, there is no one right way to raise funds for your app. With guerilla marketing and social media becoming most peoples source of news – it’s really more a question of how creative are you willing to get the funds and interest you need in your app?