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.