You’ve had this amazing HiTech mobile app idea for quite a while now. And, like so many hard-working folks out there, you want to get all the funding and support for your app all by yourself. Makes sense, right? Why pay for services you can do yourself? We totally understand this “bootstrap” mentality, and there’s a lot you accomplish through hard work on your own to launch your app idea. It’s more a matter of figuring out which components of finding and securing investors you can efficiently handle on your own.
Using the “best tool for the job” advice, let’s look over all the best ways to get your HiTech app investor-ready, and when enlisting the help of experts makes the most sense.
Create an MVP
Minimum Viable Product (MVP) is a crucial benchmark for entrepreneurs. It’s the first version of the product that they use to showcase the core idea to investors. They also use that version to ensure that it’s actually an app that people want. So you might want to create your MVP before you start your outreach to investors.
Getting the Story Straight
We know how good your app idea is, and, considering how rapidly mobile apps are being created and downloaded, getting it developed and deployed as quickly as possible is a big priority. There’s a lot of work to do, including raising funds for all that development you need.
You might be ready to start grabbing interest from investors even before you have an app to show them. How? Well, you may have worked and had success in the hi-tech industry for some time leading up to this point. This means you have insight, experience, and, most importantly, multiple connections. You know how these processes work, and how to pitch your unproven product to those potential investors you’ve interacted with over the years.
If you’re starting off at this point, you’re already ahead of the game. Not done, by any stretch – developing and marketing your hi-tech app is still a massive amount of work and time – but you’ve got a head start.
However, if you’re reading this post still, you’re likely not in that position. You’re a scrappy entrepreneur that is willing to eat, drink, and breathe your app from beginning to end. From pre-development steps through development and marketing, there are ways to optimize your success in-house, and smart ways to hire experts to do the particular jobs you may not have the bandwidth or talent for.
Setting Up for Success
Figuring out how to accomplish some of these intermediate steps can not only save money, but precious time as well. These initial pre-development to-dos seem basic, but, they make for a structured and organized checklist you can continue to come back to, as well as a plan to present to your future developer.
- Do plenty of market research. With so many apps out there, you need to know what works and what doesn’t. Find similar apps in your genre and read reviews in tech magazines and other various sites, and take special note on what the various pain points are. This might just be where your app can shine.
- Give a name to your ideal target user. Get as specific as you can with your various buyer personas, going so far as to assign age, gender, occupation…even hobbies and favorite foods! The more specific you get with these imaginary users, the better equipped you are to address their preferences and dislikes.
- Get your elevator pitch started. At some point in the near future, you’re going to have to explain your idea to all sorts of important folks; from coders to designers to potential investors, everyone needs to know your core idea, and they likely need to hear it fast. Taking your time to carefully and succinctly refine your words will be well worth it.
- Start getting some tough skin. Rejection and resiliency are key parts of any success story, so start visualizing how you bounce back and persist.
- Consider hiring an experts in mobile app development to guide you through certain aspects of pre-development strategies. Investors will take note when you are smart enough to work with a partner that has proven success.
Getting Investors on Board
Let’s face it…getting this app developed, deployed and marketed is going to take money. Costs vary wildly, but it takes dedicated funds to make it as good as you dreamed. There are different types of investors who can offer different levels of funding, so let’s take a look at who we’re dealing with.
According to Pitchbook data, around two-thirds of the deals made in the US in 2017 were between $1 million and $5 million each. The amount of funding that entrepreneurs can raise today at an early stage is staggering
- Friends and Family: Yes, these “investors” may seem limited in their effectiveness, but remember that they know you well and believe in you. Plus, smaller incidental costs can add up at the start, so having trusted and patient backers at the initial stage is a good idea.
- Crowdfunding: This may seem gimmicky and unproven, but there are lots of benefits to introducing your app via a crowdfunding site like Indiegogo or Kickstarter. Why? First, there’s potential to make some very real money, assuming you’re able to pitch your product well and document your progress.
You also basically have a beta audience to get feedback from, which is invaluable for your research, and you will quite possibly get a nice brand recognition marketing boost along the way. Finally, lots of investors make a point of monitoring these sites for quality products to invest in, so keeping visible this way is a great strategy.
- Angel investors: While these individual or small group investors might seem like a newer term, a study cited by the SEC claims that there was almost $23 billion invested in 67,000 individuals in 2012, almost exclusively in seed and startup investments, and that number is likely far higher now. Impressive number, so why are they so great to work with? They are typically affluent former entrepreneurs and CEO’s who are interested in certain sectors, have few restrictions and are flexible with development and terms of the investment, and are connected enough to potentially bring other investors in to a stellar project. And, unlike larger corporate investment teams, they are far more likely to “go with their gut” and back ideas they believe in, as well as be able to point out fatal flaws before they happen.
You’ll need to have an amazing pitch deck (check out this legendary Air B’n’B pitch deck for an example) and clear business plan to get and keep their attention, and possibly an inside source just to get an audience with them, but angels can be a truly miraculous benefactor in funding your app. There are also lists online for angel investors in your area, and don’t forget to work your LinkedIn contacts.
When raising under $1 million, professional angel investors typically provide a seed loan. The paperwork is fairly straightforward and involves less-costly legal fees. Interest rates tend to be lower and the terms involve no restrictions.
- Venture Capitalists: These are the big boys, and if you’ve got a powerful app in mind, they are likely the ones you’ll need to appeal to. While they have far deeper pockets to fund your app, they also need more accountability, more details, and a bulletproof business plan that shows exactly how your app will make lots of money.
Your pitches and plans need to be over-the-top confident and clearly show problems and solutions, and these boards of investors will need to closely examine every prototype, hire, and choice you make. It’s also more likely that your funding will start modestly, and slowly build as you prove your worth.
Keep the Faith, Keep your Investors
Whichever type of investor you manage to get in front of, having thoroughly prepared plans, thick skin, and total confidence are essential to convincing them to fund your app. Former Intel CEO Andy Grove said on this topic, “Fight like you’re right. Listen like you’re wrong.” Meaning, you need the conviction and passion to sway your investors, but also the listening skills and humility to accept your potential faults. Investors need to believe you are a hard worker and an inspired leader, yet resilient and clever enough to overcome the inevitable challenges that will pop up.
A great idea is worth a lot, but it’s the execution that will require all the work, and investors need to know that they can trust you to get it done. Remember, they’re in in for the money, also.
Are you interested in creating an app that you can show to investors? Check out Koombea’s work to see if we are the right partner for you!