How To Get Funding for an App Startup

How To Get Funding For An App Start-Up

| Funding Your App

You may have an app idea that has not been seen in the market, or at least that you believe offers something unique to what is already there and are wondering how to get funding for an app. The new big trend, something worth millions that everyone will be shouting about from the rooftops. However, at this early stage, how exactly do you reach your target funding amount to provide the world with this incredible app? Just like starting any business venture, you’ll need to reach your funding goal for success. Whether that be from your own finances, friends and family, or pre seed funding. Before putting your all into your new mobile app development, you need to secure funding options to guarantee the biggest chance of profit from your upcoming venture.

A startup company refers to where entrepreneurs set out to start a new project or product; where they either fund themselves as the founders, or seek to raise funds through various other methods. The different techniques you use to raise money will depend on the type of app you are looking to develop. This may differ on how complex the functionality of your app will be, and the scale that you are looking to reach. Below, we are going to talk through the top five funding directions you can take for your business plan in order to reach your funding goals.

Ideas for funding app development

| How To Get Funding For Your App Development

- Angel Investors

Seed funding, or ‘angel investors’ is the first amount of money to hit the bank for your new app adventure. This will fund important stages of your project, such as market research, and funding for app development in the early stages. Seed money is a form of funding where potential investors offer a funding amount, for exchange in an equity amount of the company once launched. When searching for angel investors, you need to know exactly who you are looking for; the perfect profile for an investor who you believe will be interested in your product. One of the best ways to secure angel investors is through networking, this increases your chances of being referred, and most importantly trusted. There are also a few networking websites for angel investor matching, such as Angel Investment Network and Angel Match.

- Venture Capital (VC Funds)

Venture capital can come from venture capital firms such as investment banks and various other financial organisations. This form of private funding can take place at any stage of your project, from a group of professional investors who specialise in funding startup projects and know exactly what they’re looking for. Much like angel investors, they will be looking for an equity amount of the company, however, will want to be much more involved and engaged with your product growth. To get the highest chance of investment, create a list of VCs you are looking to target for your funding, and do extensive research on each. You will most likely be asked to present a pitch deck to your venture capitalists, where you need to communicate why your app is powerful, worth investing in and how you believe it will make money.

- Bootstrapping

This funding route refers to sourcing money from personal finances. Difficult for many, but successful for some. You may use savings for the first stages, cross your fingers and hope for the rest to come from income made once launched. This is the best idea if you want full control over your product, without any external ties made with various investors. If done successfully, it can also mean you can make a huge amount of money without having others required to take cuts from your revenue. It’s a risk, but if paid off, can have incredible results. You will have time to focus on all the important parts of your app; the development, design, digital experience and how your users will interact with it.

- Friends and Family

Whilst you may be looking to fund your project yourself, it is always important to get friends and family onboard. After all, these people closest to you will truly want to see you succeed, and will often try their best to help you in life. Talk through your idea with them, pitch your product and let them know exactly what makes it special. This can be highly effective as it is often a much more informal funding option to private investors, that will feel more relaxed and easy going in comparison to the more firm ties.

- Crowdfunding

Crowdfunding involves pitching your product to a huge community, usually through the internet, in order to raise funding for your product. This has proven hugely successful, as each individual can invest even a tiny amount, yet by a large amount of people, resulting in it adding up to a substantial sum of funding. There are many crowdfunding platforms over the internet where you need to construct and deliver a strong pitch. Make sure to sell your product story, it’s unique features, the innovative solution behind it and how it will make a difference to your target audience. Always remember to include visuals, videos, and follow brand guidelines throughout. This will not only allow you to become memorable, but also increase your chances of rating highly in listings.

- SEIS (Seed Enterprise Investment Scheme)

The UK announced an innovative scheme back in 2012 with the vision to help small businesses grow. This not only means companies receive funding, but also that investors get a tax incentive for investing. If you are wondering the types of businesses that qualify for the scheme, check out a few of the main requirements below:

  • Maximum of 2 years trading
  • Gross assets less than £200,000
  • Fewer than 25 employees at the time of investment

  • SEIS has been particularly popular in app development, and has incredible benefits for investors. You can gain significant tax reductions, with 50% of your investment being claimed back in tax relief. As an app startup company, you can either approach investors directly, or through an SEIS fund.

    | Develop Your App With AppTailors

    Here at AppTailors, we specialise in mobile app development and design. Our team crafts digital experiences, with high-quality functionality and beautiful designs. We are passionate about making our client’s visions a reality and are able to work with you from the very start to the end of your product. We offer design consulting, tools, and resources to businesses of varying sizes, with the same dedication behind each project undertaken. Are you interested in building your app with us? Get in touch with one of the friendly team today to start your journey.