As the founder of Cubix, a digital product development company, I receive lots of queries in my LinkedIn Inmail regarding how to raise funding for an app. The website of Cubix is always flooded with the same question and I always thought of writing a brief guide on this topic.
With apps booming globally, almost every techpreneur has an app idea in his mind but the problem is as always - lack of funds and as you know, ideas are nothing without execution. Securing a hefty amount of funding for your app is a tedious ask but everything can be made easy by following the right process.
Since I have been building apps for more than a decade, let me guide you people on raising funds for your app even if you don’t have a dime to invest.
Startups operate in numerous shapes and sizes. Venture Capitals, self-financed or bootstrapped can completely fund them. To build a tech startup, you require cash and how much cash you require depends entirely on the sort of application you might want to create. If you are searching for a primary application with insignificant usefulness focusing on one platform (i.e., iOS/iPhone) a basic MVP could cost as meager as 10k.
On the contrary, if you need a mind-boggling mobile app which depends on a back-end API server, keeps running on both the platforms, iOS, and Android and has a front-end web support, you’ll be needing a cheque of 25k to 100k. However again, the absolute cost depends upon the functionality and list of features that you want to include in the app.
Bootstrap and Self-support
Self-funding, also known as bootstrapping enables you to put your investment in yourself; your thought, your business. It is a simple begin, and you can initiate straight away. Numerous extremely fruitful organizations and startups in the tech industry took off with self-funding and made it big.
If you are excited about bootstrapping, you have to remember one major thing that app-preneurs often miss while budgeting. After that your app is up and running, it needs substantial funding for marketing, and you shouldn’t be spending all of your money on its development. App marketing includes Facebook promotions, Google AdWords, app store optimization, etc.
Companions and Family
Another great choice to keep on the Bootstrap process is to pitch your plan to your close aids, allies, companions, and loved ones because after all, who don't want to become an entrepreneur?. I'd recommend you should pitch your thought professionally as you want a genuine financial specialist you don't have any acquaintance with.
Moreover, they don’t need to be briefed about the core functionality and technical aspect of your app. You need to ensure them how they’ ll be making money out of your startup and the duration in which they’ll get their cash back.
While this idea seems too easy to be true, working with friends and family can positively affect your relationship with them. While dealing with this situation, I would suggest you keep your hazards on and maneuver things accordingly.
Individual or Business Bank Loan
This is the option where most of the businesses land into. You can get a personal or business loan from the bank, and the good thing is, you’ll be getting the amount you want along with knowing the markup rate. You should experience the standard structures, Q&A's and you’ll witness banks toss at your idea.
You can illustrate or depict how your application business will profit pushing ahead. You’ll be needing a statement, a plan and moreover, an attractive polished proposition of your idea so that you can advance with your loan application.
Is your application thought focused at a particular industry? Why not pitch the plan to some high flyers in a suitable business? You might look for the right individual, and he may finance your app for a % stake in your business.
This idea has certain drawbacks attached to it, and one of them is to convince the individual with a solid pitch, approach and a demonstration of how will your business run. To tell the truth, your business model.
Private investors would need a solid plan that would indicate how their money will be invested, in which areas and funnels attached to it. However, it can offer numerous favorable circumstances, for example, industry learning and associations.
Funding (VC firms)
A Lot of favorite startups picked the course of going to VCs and undoubtedly, they scaled up globally due to their pick. Think Uber, Airbnb, Facebook, LinkedIn. The VC course requires significant investment. You will require a genuinely spontaneous pitch and be prepared to have your thought formed into how the VC firm observes the quickest course to progress and a profit for their interest to invest in you and your thought.
This is your fastest route to easy street, however not every person gets financed here, and even if you bag the investment, there is still no assurance of achievement, but this is an excellent begin if you can get VC at a beginning time that is willing for the ride. This must be uplifting news for you as it’s the first sign of your idea having the potential of making it big globally.
Moreover, don’t think the other way round. If you didn’t make it to a VC initially, you could still get the funding later, and there’s no rocket science in it. If you buy my opinion, the best practice is to fund your startup by yourself first and when it seems like the show has to be taken to the next level, find a VC that will put its belief in you. After all, who knows you might be the next big thing in the industry same as MailChimp or SnapChat.
If you need to build your app immediately and don't have any room to delay or schedule to figure out how to code it yourself, there is another approach to do that. App engineers are always on the hunt to get hands-on experience of developing unique app ideas. They could be there on the web or at an online platform.
In this case, if you are thinking of how you’ll approach the right app engineer or a team of appropriate app developers, there are heaps of options available. Scan LinkedIn and get an app developer on board by viewing his projects, accomplishments, and achievements. Look for company portfolios and if you can relate with any of them, ping that agency.
Similarly, expand your search by approaching companions for suggestions. If you are another college drop-out in the making, ask a teacher in the software engineering department for a proposal. This approach may also save some cash for you as your idea will get on floors as a case study or degree project just like Facebook happened for Mark Zuckerberg.
Freelancing is another option to opt for and trust me; it has done wonders for people. Elance, People Per Hour, Fiverr, Upwork and various other online platforms are there to help you find the right app developer for your app idea. The authenticity of these platforms is proven, and with the latest IPO of Upwork, these platforms are bound to live up to your expectations.
Whomever you employ, take a brief look at their past work, approach them for precedents of their abilities, and converse with them about your vision by wireframing and see their thoughts for how to make it a reality.
Ensure that you have an agreement or contract in writing before you begin. This may cover all possible and unavoidable situations for example, what may occur in case of a deficient task or what would be the course if they opt out from your idea in the middle. Oh, and don’t forget to get an NDA signed so that your app idea stays safely only with you. Additionally, you can discuss iOS versus Android apps to get insights about the competency and vision of the potential candidate.
Pick a drag and drop app
Another approach to making your application without figuring out how to code is to utilize a program that will compose the code for you. These sorts of "simplified" apps or online portals make it simple for anybody to assemble a fundamental application and are effectively discovered on the web such as MobileRoadie, AppyPie, GoodBarber, etc.
The advantages of going down this course to make your application are that, similarly, as with hiring a consultant, you don't need to figure out how to code—at the same time, you can be more in charge innovatively. You don't need to pay another person to compose the code. The management and app building process may cost cash, but that’s okay, this is the part of the app development game.
A major downside of this technique is that you are restricted to what the program offers, which means you may not get precisely the same level of innovative opportunity or capacity to redo your app and apparently, it isn’t a perfect alternative of an app built with customized coding.
Make your app yourself
Obviously, the most effective and genuine approach to ensure your complete control and responsibility of your app is to develop the app by yourself. Also, it might be less demanding than you might suspect to get the right stuff that you have to get it going. You can figure out how to code in a conventional school, on the web, or with a more particular vivid boot camp.
The definite advantage of this course is you will learn abilities that will stay with you forever, and they will keep on serving you in refreshing your application or scaling it up later on. You’ll be solely responsible for your success, vision and cash flow of your app.
However, this course will likely cost you more cash than the choices, yet it will be in a phase of a limited number of installments. You’ll become the captain of your ship, and by this way, you’ll be learning and investing in building your app at the same time.
The Next Move
Now that you are well aware of how to get funding for your app, it is about time that I let you know about the post app development measures that are necessary to keep your app up and running successfully.
App development - A risky business
Launching an app isn't easy. In fact, it is tedious, exhaustive and will drain your mind in terms of creating spellbinding strategies. Thinking the other way, it takes a hefty amount of dedication, money, right frame of mind and hard work to make an app a success.
While building an app could be the best decision of your life, it can turn sour in no time too, and this is why you need to know the app business inside out before stepping in the soil for the first time. To narrow down the struggle, ask yourself three questions:
- How much can you wait for your app to become a success?
- How much money do you have to invest in your post app marketing?
- If your startup fails miserably, what would you feel?
What value does your app create?
App Stores have over two million apps, and it is quite challenging to get your app discoverable between these millions of apps. Your app should have a USP so that it sells in the presence of numerous other apps. Follow these questions to derive your app’s differentiating point:
- Does your app offer any unique feature?
- Is your app a pain-point solver?
- How does your app stand out among other apps of the same niche?
The plan is
Your app is a product, and the statement should convince you to build a business plan for it. Come up with a plan that starts from the lows and gets to highs of an app.
Marketing your app the right way is the key and to come up with the right strategy, you need to define your post app marketing activities point by point. Think for post app ideas and get them validated by conveying them to your potential customers or prospects.
Hit the trigger
Aligned with your app idea and done with your post app collateral? It's time to launch your app with all of your tools on board. Be it strategy, product development, pre or post-marketing, etc.
Take your app idea to the next level by making it available for users so that it gets scrutinized and the feedback from the users will give you a clear idea of how can you turn your app into an addictive ingredient of your users live.