Best Ways to Raise Capital for Your Mobile App Startup Idea to make it a Success?

Have you ever read an Instagram success story? It seems like a Silicon Valley fairy tale for many of us.

A venture capital funding of $50,000 inspired the 27-year-old Stanford University graduate Kevin Systrom to support his venture of developing a photo-sharing app known as Instagram.

In the first week after Instagram launched in October 2019, it had been downloaded more than 100,000 times and the rest is history.

Do you have a mobile app idea that you think can create a success story like Instagram but lack the funds to get started? If so, then we have got you covered.

Mobile app funding is one of the most difficult obstacles every startup owner encounters unless you have got a rich father.

The purpose of this blog is to help startups raise their initial funding to kickstart their journey to becoming million-dollar-worthy successes. Here we have a rundown of the best ways to get funds for your app startup.

How Much Capital Do You Need to Develop My Mobile App?

This is one of the most difficult questions for startup owners. It is hard for them to estimate their financial needs accurately which adds an additional level of difficulty for startups to raise funds.

Having the wrong estimate of the budget is a double-edged sword for you. If you have less funding your Mobile app startup idea won’t be able to execute according to your expectations. In the other case, if you have raised the higher budget, you will have a lower percentage of ownership in the business.

An effective way to begin your app development funding journey is to develop an accurate estimation of the funding you need to get your project off the ground.

If you struggle at any point find and consult the Mobile app development companies to get an idea of the budget you might need.

Getting Your App Noticed and Funded

What have you learned from the above funding story of Instagram? You need to have a unique Mobile app idea that you genuinely believe in. At that time Instagram was the first app that allowed users to share their pictures clicked using a smartphone. This attracted investors to invest money and resources in the development of the Instagram application.

You also need to have a unique app idea to bolster your startup’s chances of getting funded.

Put yourself in the place of investors and think about why you would invest your money and resources in a startup.

You have to inform the investors about the good points of your app startup and what problem your app will solve. If you are going to sell your Mobile app startup idea, therefore it is essential to develop the utmost faith of investors in your mobile app development idea.

Once you have all this information about your startup, the next thing you have to do is create a perfect pitch for the app startup and present it in front of your potential investors.

Just to add some brownie points to your funding pitch, you can also develop a minimum viable product (MVP) for your startup. MVP will help your investors to understand your app development project more precisely.

Read More – Leading Mobile App Development Trends

What are the Different App Funding Options Available For Me?

When it comes to the sources of small business startup funding, there are multiple choices available. The following are some of the most popular ways to raise capital for your startup:

Bootstrapping Your Mobile App Startup

Bootstrapping is also known as self-funding. It is one of the best ways to raise capital for your startup business, especially when you are at the beginning phase of your business.

First-time startup business owners often struggle to find potential investors and fail to impress them due to their lack of business sense. In such cases, you can invest from your bank account to off-ground your business.

If you lack financial support then you can ask your friends, family members, or relatives to invest in your mobile app startup idea. This is also a better option as family members and friends are flexible with the interest rate and sometimes you might get funds without any interest. Once you have developed your business and proven yourself to be a startup gem, you can approach investors to meet your extending business needs.

Set up a Crowdfunding Campaign

Crowdfunding emerges as the best option when you have no resources in your circle for your business startup funding.

Crowdfunding refers to raising app funding from a pool of investors where each of them invests a small sum of money in your business app idea.

There are hundreds or thousands of business app ideas posted on crowdfunding platforms each day. In the wake of this, there are high chances that your startup app might go unnoticed or unfunded. Therefore, you have to make extra efforts to make your business stand out from the competition.

Here are a few of the crowdfunding platforms where you can post your startup business idea to raise fund for it:

• Indiegogo
• SeedInvest Technology
• MightyCause
• StartEngine
• GoFundMe

Develop Your Own Website to Raise Capital for Your Mobile App Startup

As said, there is a lot of competition on crowdfunding platforms which might be the reason to go your app idea unnoticed. In addition to these, there are also hefty fees associated with these crowdfunding platforms.

The smart way to come out of these problems is to develop your own website which describes your business strategies and pitch to lure your investors. Through this website, you can promote your site visitors to raise small capital for your business and in exchange, you can reward them with shares of your business.

Read More – Cost of Website Development

Find an Angel Investor for Your Startup

Angel investors are those who offer funding to startups in their early stages at a time when they have no revenue. These are often the CEOs of the local businesses running in your area.

For example, if you’re going to build an app to find local mechanics. You can pitch a local garage in your locality to provide you with the fund to get your app development idea off the ground.

Angel investors seek equity (varies depending on the invested amount) in exchange for their investment in your mobile app startup.

Venture Capitalist May Also be Appropriate For You

Venture capitalists are very much similar to angel investors, however, they come with some additional advantages. In addition to small business startup funding, VC also offers mentorship to startups to make sure they perform well in the market.

An additional benefit of venture capitalists is that they exist when a startup launches its IPO or acquires another company.

Bank Loan

A bank loan is the last favored way of mobile app funding on our list. This is because the bank doesn’t care if your business succeeds or fails, they expect you to repay the debt by a specific date. That’s the reason why we have placed the bank loan as the least favored method of startup fundraising.

My Startup Idea has been Funded, What’s Next?

This was our rundown of the different methods you can use to raise app funding. I hope after going through these methods you will be able to raise startup funding for small businesses.

Now your startup is funded, the next step is to work on making your startup a reality. You can do so by hiring a mobile app development company. Go through all the referrals of top app development agencies available for you and pick the best one that resembles your app development goals precisely.

You can consider checking out App Development Agency’s list of top app development companies. Here you will find references to the best mobile app development companies you can work with to fuel life into your app startup ideas.

FAQ

1. How Can I Fund My App?

Here is a list of methods you can use to raise funds for your startup:

• Set up a crowd-funding campaign.
• Find an angle investor or venture capitalist.
• Participate in startup funding contests.
• Bank Loan

2. How Can I Get App Investors?

Investors are less interested in investing in app ideas that are common in the market. If you want to find the investors for your app idea, then you need to come up with something unique that allows you to solve key pains of the current market.