Having a great app idea is not enough to make it come true. Millions of people come up with great app ideas daily, but when it comes to execution, only a few are able to make it to the market. One of the most difficult stages of the app development process is finding the necessary funding. No one really teaches how to look for it.
At Koombea we have lots of people who contact us regarding funding related matters. The most common question is how to find funding to develop an app. Because we want to help your app come to life, we have elaborated this list of techniques and ideas to fund your project. Many more alternatives exist, but these are the ones we consider to be more not only absolutely necessary but also realistic. Depending on your ambitions some recommendations should be prioritized over others, but that is something that only you can decide.
Prepare an Elevator Pitch
This should be at the top of your to-do list. An elevator pitch is a way of explaining to your audience what your concept is in a succinct way so that anyone can understand it in a short period of time. By itself, it won’t get you the necessary funding, but if you don’t have one you are going to have a hard time. In other words, it is necessary but not enough to have one. Remember that potential funders will judge your idea based on what you tell them, so spend all the energy you can on this.
There is no one size fits all format. However, this can be decided based on the audience you are trying to address. It is not the same to present your elevator pitch to venture capitalists than to your family or friends. Ultimately, your creativity will help you decide which format fits best.
A good elevator pitch should: explain what your product or service is, why it matters, for whom it matters, what problem it solves, why your idea is better than others, and how it will actually solve the problem. Failing to do so will result in potential failure.
Ask in Your Network
Most people tend to discard this option without really considering it. We strongly suggest reaching out to your closest contacts, including friends and family, to look for a solution to your financial needs. Do this before contacting big players. Some people might be interested or they might even know about someone who is. If nothing works out with them it will still serve as an opportunity to prepare and practice your elevator pitch, so don’t think of this as a waste of time.
Thanks to alternatives like crowdfunding it is possible for early-stage ideas to reach out to large audiences and ask for funds. With this option you have access to an important number of people who may be interested in individually contributing to your project. Although each individual contribution might not be substantial, volumes do make a difference. The success of this strategy depends on your ability to connect with people, so don’t over rationalize. Instead, try connecting at an emotional level.
It is important to generate relevant content that will help you communicate your idea and motivate people to contribute. Visual material tends to generate a stronger impact than plain text. Videos are a great way to communicate your message and it is easy to share. A 3-5 minute video should do it; remember that people don’t like watching long videos. Consider giving your contributors a reward as a sign of appreciation.
Some of the most important crowdfunding platforms are Kickstarter and Indiegogo, but they are by no means the only ones. There are some that are even industry-specific depending on what you plan to do. Just remember to consider various alternatives if crowdfunding is your final choice and check the terms and conditions. Most platforms have specific rules and may retain a part of the money you collect. Also, if you don’t meet an expected goal there might be certain conditions that apply.
If you feel crowdfunding is ideal for your app maybe you should also check funding opportunities like an Initial Coin Offering (ICO). In this little known modality a token is offered in order to raise capital. This token is usually a cryptocurrency.
This is the alternative most people think of when considering their funding options. Investors have the potential to solve your financial problems for years to come (assuming that you don’t go bankrupt and play it smart). There are many types of investors, so it is a good idea to research them and decide which makes the best fit for your project.
If your app has some serious potential we highly recommend considering funding platforms known as startup accelerators. Y Combinator, Techstars, and 500 Startups are some of the most popular. The main advantage of accelerators besides funding is that they can help you mature and grow your idea. Being endorsed by an important accelerator is an almost guaranteed way of scaling your app.
Other investor alternatives include venture capital funds and angel investors. These are people with a long trajectory of funding apps, so their expertise is a valuable asset that might also interest you. Just keep in mind that they are professionals at what they do, and they take their job seriously. If you decide this is your path, make sure to have the necessary professional background.
Other Tools and Alternatives
Another alternative to consider is whether you are willing to be the sole owner of your app. If this is the case then you might consider bootstrapping it; we recommend you read our post on the subject. Just consider that doing so might be hard, however, the results might be worth it.
Two other alternatives you can consider to fund your app are getting a loan or looking out for app contests. There isn’t much to say regarding loans except maybe that you should seek expert advice to make sure you understand the legal implications and that you can meet your financial obligations. In relation to app contests, this is something that is very specific to the industry you work in, so make sure to find out what opportunities are available to develop your idea.
One last alternative is to use app-specific funding platforms. These are specially designed to help app-based startups get the funds they need. A good thing about this alternative is that it allows you to sell your app at an early stage, making some quick money rather than embarking on a long term adventure.
The cost of app development isn’t cheap, but the alternatives to fund your app are many. In the end, there is no good or bad option. This is something that only you can decide depending on what your plans are and what the potential of your idea is.
We know that this is one of the toughest parts of bringing your idea to the market, but don’t feel discouraged. Good things take time, and the results are worth it. If you feel like you’ve got the financials of your app worked out it might be time to start looking for the right development partner. When that moment comes, contact us. We’d be more than happy to help your idea come to life.