Do you wanna get funding for a smartphone app? Maybe an iPhone or an Android app?
Today, I’m going to walk you through the various funding channels for getting funding for an app. These include crowdfunding, angel investment, and more.
We all know that iPhone or Android app development is pretty expensive. You gotta do the mockups, renderings, coding, graphic design, and of course, you gotta promote it. Those costs can really add up.
Thankfully, there are some ways that you can help offset these costs. You can use the funding sources that I’m going to be covering in this video to tap in the power of online fundraising to not only get funding but also turn that dream you have into reality.
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Wanna know something weird? App funding works differently than any other funding type that I’ve seen online. Let me tell you why…
Crowdfunding is bad for apps (except this type)
You don’t want to run a Kickstarter or Indiegogo campaign for an app. Unless you follow a very specific strategy, it’s not gonna work out very well. Promise me.
The reason is that backers supporting campaigns under this type of crowdfunding are expecting something tangible from you. The idea of possibly owning some future access to an app isn’t really that compelling, no matter how you spin it. That’s why it’s harder to get funding.
Also, you gotta hop over that skepticism that all backers have in terms of whether or not you can actually make the app. We’ve all used poorly made apps on the iPhone and Android.
However, you’re in luck, because there is another type of crowdfunding that is really good for apps… equity crowdfunding. Equity crowdfunding campaigns are proving to be a good way for apps to get funding and to build up their user base with a crowd of investors.
If you want to get funding for an app, and you don’t want to use one of the traditional avenues like VC or angel funding, then I would look into starting an equity crowdfunding campaign.
Mobile apps startups are hot
Just look at some of the recent billion dollar companies like Uber, Snapchat, Instagram, Whatsapp, and the list goes on. They are all apps!
Venture capitalists have witnessed the power of apps and the ripeness of this mobile landscape. It’s clear that the phone is becoming the new television. Our attention is going there rather than watching commercials on TV.
In order to enter a high growth industry, venture capitalists naturally need to fund app-based startups. They have a high potential for scalability and it’s getting easier to acquire customers with paid advertising.
In fact, many companies will grow the user-base for their app by simply doing paid ads on Facebook or Instagram in order to drive signups.
This puts you in a great position as a software entrepreneur. You can take advantage of this change in technology and ripe funding landscape in order to build a company in a fraction of the time.
This is the barrier to entry
Unfortunately, it’s nearly impossible to just get funding for an app idea any more. I’m talking about raising money off the strength of the “idea-stage” company alone. It’s not gonna happen.
You need to show an ability to execute. You need a great development company that understands your vision and create multiple iterations of the app. At the very least, you need mockups of the app that you can show to potential investors.
Gone are the days when you could just scratch an app idea on a napkin and get people excited enough to give you money. Instead, you actually got to show that you can do something with their funds.
The best thing that you can do is get some early users for your app, even if it’s based on a not-so-great alpha version of the software. This way, you’ll be able to validate the initial concept and also drum up some testimonials and interest.
If you don’t have any form of traction or product-market fit, then it’s gonna be super hard to get investors on your side. Feel me?
I hope that you enjoyed today’s video, which went more in-depth than we did here. If you want weekly emails from me with my best content, you can join my newsletter down below. It takes two seconds.
As always, I enjoy helping you as you’re growing your company, startup, or, giving you more confidence as you are starting your very first entrepreneurial venture.
