Few of us can imagine life without apps these days. We all know they’re big business. So how can you get started if you have an idea for an app and don’t have the means to fund it in order to get it onto the market? Here we take a look at six ways to get funding for app development.
When you’re creating a mobile app it’s essential to save as much money as you can to fund development. Set up a mobile app fund and contribute a portion of your earnings from your existing job to it each month.
You don’t necessarily have to do this alone. Finding a friend or acquaintance who believes in your app idea enough to become your business partner and contribute some of their own money to it will ease the strain and get you started quicker.
This strategy will also impress potential app investors further down the line. It shows you and others are serious about your idea and believe in its possibilities enough to take a financial risk on it.
2. Sweat equity
Sweat equity is an investment of skills and effort into your project instead of money. This can come into play when choosing a business partner. A friend or acquaintance may not have money to invest, but they may have the tech knowledge to help you develop a prototype for free. Their sweat equity can be valued by how much time they invest in your app and what that time would have cost if they were being paid. These factors should be taken into account when pitching to potential mobile app investors.
Government grants are available for business start-ups in Australia. They’re normally hard to obtain but they have a large advantage over bank loans in that you don’t have to pay them back. Information about grants and assistance can be found on the government website.
There are also a number of companies online who offer app funding, such as Mobile App Fund and AppStori. Each has its own conditions and procedures, so you’ll need to do your research before approaching them.
There are a lot of competitions worldwide now, which reward the best ideas with app development funding. The judges are usually investors and you will have to seriously impress them with your pitch. Two of the best-known competitions are the App Idea Awards and the CodeLaunch App Competition, but there are a wide variety of other competitions posted online.
5. Angel investors
Angel investors are individuals who are prepared to invest in companies who have ideas which are still at the concept stage and not yet developed.
One of the best ways to find investors for an app is to get introduced to them through a respected person that they already know and trust, such as the CEO of a company they have already invested in.
If you get the chance to pitch to potential app investors, you’ll have to have a detailed presentation in place. They will expect to see a sound financial plan which details how much money you will need to fund your app development. They will also want to know the credentials of your team, and how valuable your app will be to customers. A prototype or interactive demo is a great way of demonstrating this and proving your dedication to the project.
6. Developing an MVP
Investors will also want to know that there is a large target market who will buy into your app, so they won’t have to wait long to see a return on their investment. This is why it’s important to know that your app fills a genuine gap in the market.
One of the best ways of discovering this is to develop an MVP (Minimum Viable Product). This is a very basic version of your app that contains all the most important features of your idea. As it is so scaled-down, it is much cheaper to develop than the full app you ultimately envisage.
Developing an MVP is a great way of testing the market for your app. It allows you to determine how unique your product is, and get user feedback which will help you to improve the finished product. This will make it much more likely that you will get funding for an app from an investor.
Crowdfunding is an increasingly popular means of raising money for app development. It normally involves you “pitching” your idea to a huge amount of potential investors at once via a description on a website. People can donate money if they think your idea is worthwhile, sometimes in return for rewards. Kickstarter is probably the best-known crowdfunding site, but there are a number of other popular crowdfunding platforms in Australia.
Knowing how to fund an app is the first stage in its development. With a lot of perseverance and the right people behind you, you have the potential to succeed and reap the rewards.
Find out how Dapper Apps can help kickstart your funding strategy