How to find investors for your mobile app
There is no doubt the development of a mobile app can cost…a lot. But don’t worry, you don’t need to break your piggy bank as there are a lot of people who would be interested in investment (of course, if your project is good) in return for a share in stocks and future profit.
You need to answer this question – is it better to do everything on your own or to share your project with people with cash and knowledge. In most cases, the answer is simple and obvious – the right partner can give your app a rocket start. Not only in cash, but also with the knowledge and contacts.
At this moment you also need to realize one thing – nobody wants to pay for an idea. This was happening in the times when the app market was not mature, but currently you need to give much more to the investors than just an idea. The better you are prepared, the easier it will be for them to make the decision about supporting you.
| Where to start when looking for investors
Where should you start? Well, there are a few points that you need to do anyway during the process of the app development, and they can also be useful during the process of looking for funding. For example, a proper, strategic research is the best place to start. This will help you show to your investors how the market looks in your niche, how powerful are the competitors, what is your plan for success and why your project is better than everything on the market. For sure they will ask you about the problem your app is solving, what your end-users really need, what features you want to include. Simply, they need to know everything about you, your project, and the market as it will help them make your app successful and the right research in the beginning is vital.
As a second step you can consider basic marketing activities. It is always nice to look at an app with the name, whole branding around it, professional marketing materials, logo etc. It does not need to be an expensive process as currently there are a lot of services where you can hire marketing freelancers with low costs (like for example UpWork and Fiverr). The right branding can be a sign for your investors that it is a serious project, and they invest in something more than just an idea. Don’t forget about a nice domain, as later it may be not possible to buy it, when your project becomes famous. Don’t also forget that people are buying with their eyes, so make sure your project shines like a diamond and the investors can visualize and understand it.
One of the most important marketing materials you can create for your project is a document called the elevator pitch. What is an elevator pitch? It’s a short document, describing the general idea of your app – like what is your target, what features are included, how far you are in a development process etc. The general idea of elevator pitch is to know how to present your project in around 30 seconds – exactly in the time you and your investor will have when you meet in an elevator. The better your elevator pitch will be, the better chance for a meeting you have.
| Getting your product ready for investment
If the investor is interested, you will probably need another document called a pitch deck. A pitch deck is a longer version of the elevator pitch, where you can describe more details, features and processes of your project. Just remember, a good investor sees hundreds of them every year and his time is precious so remember that your pitch deck should stand out from the crowd, be easy to read (don’t forget about pictures, graphs, data) and remember to cut out unnecessary information from it.
It will be much easier to get the investment if you have something more than ideas and marketing – here comes in handy a good MVP – minimum viable product. A first stage of your product, letting you collect the knowledge about your early adopters. It will also help investors to visualize the idea and once again it will be proof that you have something more than an idea. You can read a dedicated article about building the MVP on our blog HERE.
Those three elements – research, marketing and MVP are the important pillars of pitching to investors but…where to find them? Well, there are a lot of ways to do it!
| How to find investors
We advise you to start from your personal network – think about your friends, post the message on your LinkedIn profile, ask in dedicated Facebook groups. There is a high chance that you will find someone who has cash to invest in a new business or at least know someone with it or someone who is for example. working for a venture capital (it’s a type of company who invest in other companies – they have supported many successful projects in the past; in our opinion this is one of the hardest and longest way to get funded but if you succeed…you are on the fast lane to success; they also do not often invest in ideas, more in apps with traction). Do not forget that friends and family can also be a great support and motivation for your work. If your network is not that wide – you can always extend it, for example visiting a few startup events in your city.
When you visit some events – look around, maybe they are organizing some app / startup contests? Usually in those types of contests you can meet a lot of angel investors (best for the early stages; usually you discuss with smaller teams and the amount of investment will probably be smaller), venture capitalists and businesspeople. Also, don’t limit yourself to only your location as the world is a global village now and you can look for funding in other cities, countries or continents. Even if you don’t win them, it is a great chance to promote you and your project – start from the smaller ones and go bigger.
If it is hard for you to find one investor, maybe you will look for…many of them? Sounds non-logical, I know but believe me – there is a lot of logic in this sentence, as there exists crowdfunding where…well, you are literally getting funded by the crowd. Many popular apps find their financial support through crowdfunding and are currently successfully operating in the market. Also, it is a great way to simply promote your app. You can find different online platforms where you can present your app in front of people – like Kickstarter or IndieGogo.
There are three popular models in crowdfunding – donation-based (where people don't expect anything in return), reward-based (especially good for entrepreneurs; people support you in return for some reward, like for example a sample of your product or earlier access to the app) and equity funding (people support you in return of shares in your company).
You can also develop your app with bootstrapping – you start with your own cash and the full control over the project stays in your hand. It is a very good way to start, later you can always ask others for support, but thanks to bootstrapping you can already be in the phase where this will be much easier.
| How funding rounds work
- pre-seed round – perfect for when your app is still an idea; you are in this round after your app is funded by bootstrapping, friends or family and you spend money on strategy, research and building an MVP
- seed round - perfect for the next phase, when you’re app is evolving from idea to reality; usually backed up by more professional investors; you use the money for the development, operations, testing etc;
- series A – perfect when you look for the cash to build the growth of your app