If you are planning to build a mobile app, understand that it is not a cakewalk. Developing a simple app requires more than $10,000 on few instances. The more features you would like to incorporate the higher the expense. However, if you are looking for various options of funding for mobile app development startup, the paragraphs below can throw some light on the same.
Mobile App Development Startup
There is no umbrella solution for funding a startup or a fixed amount. Many aspects decide the cost. Few of the expenses that you must consider include operational cost, cost of space if it is not in your own premises, paying team members, and expense for software applications and tools required for developing the app.
Sources of funding for an app/app startup
Check out the following-
- Bootstrapping
- Private investors
- Bank loans
- Personal network
- Crowdfunding
- App funding contests
- Angel investors
- Venture capital (VC) investors
The options mentioned above have their own advantages and disadvantages. As such, you must weigh them and then decide which one is the best option for you. just as you gain some funds for the above sources, they too expect something in return. Let us see the table below for a better understanding. You must also give away some percentage of shares in your mobile app development startup as you seek their help.
|
Stages of funding |
Funding amount |
Percentage of shares expected in return |
|
Pre-seed |
$100,000 |
10 to 25% (Angels) |
|
Seed |
$150,000-1,500,000 |
10 to 25% |
|
Series A |
<$3,000,000 |
25 to 50% |
|
Series B |
<$5,000,000 |
Equivalent 33% |
|
Series C and beyond |
>$5,000,000 |
Equivalent 33% |
Getting funds for mobile app development – Why will investors shell out cash?
There are no free lunches we all know. So, when an investor is putting in his money in a project, the idea must be appealing enough to convince him. These points will help you to convince the investors.
Strategies for convincing investors
Remember, one of the biggest aspects that investors consider while shelling out their funds is ROI or Return on Investment. Aside from the same, pay heed to the following strategies.
- Your idea must stand out from the rest
The ideas you put forward must be different from the solutions that are already in the market. Address the points that offer a solution on a large scale. It must satisfy the pain points of the general people.
- The idea must be in tandem with the market requirements
The idea of the app that you conceive must have a demand in the market. In other words, it should not be just any other solution doing rounds in the market.
- You have a team working upon the plan
A vision to expand, a team of like-minded members, a common goal, persistence, and perseverance are all that you need to convince your investors.
To sum it up, mobile app development companies are most of the time fly-by-night companies, the reason which investors are apprehensive to invest. So, if you have a strong idea and a drive to win, getting funding for your mobile app development startup will not be ahindrance in your dream project.