What Are The Funding Options For A Mobile App?
We recently covered whether or not crowdfunding an app was a good idea and realized we put the cart before the horse so to speak as we never really delved into what are the funding options for a mobile app all told. You might have an amazing idea for a hot new app that could be a game changer, but aren’t sure how you can turn that idea into reality.
For those people without an existing track record of success and subsequent list of investors who know your ideas generate a solid return on investment, what exactly are your options?
After all, you can’t just let that million dollar idea sit on the shelf collecting dust can you?
First things first
A quick question; does this need to be a high end project? In some cases rather than dropping down $100k or more, it makes more sense to build a cheap prototype that has essential functions and then will allow you to see if your big idea is worth investing big bucks. Consider that aspect before you pursue funding.
By making a functional prototype that you can then show to investors as you look for backers with the big checkbook that can pay for a high-end, finished product.
Rather than focusing on trying to create a complete app that you can sell on Google Play, the goal should be to create a vehicle you can take to venture capital (VC) firms in combination with a great business plan and sales presentation. Then after you have a VC firm backing you, the real app can be created.
Top funding options
- Fund it yourself – If you have an idea you really believe in, why not put your money where your mouth is and fund it yourself? Now this isn’t to say you should spend the kids’ college fund or tap into your retirement fund, but if you have extra savings for investing, why not invest in yourself?
- Family project – Do you have a rich uncle or perhaps your parents are flush with cash? If so you can always look to them for funding. If you truly have a great idea that you believe in and stand behind, you can probably convince your family that it is a worthwhile pursuit as well. This option has some merit when you are also putting in your own money and time showing that you believe in what you are selling.
- Build it yourself – People with a technical background might decide to just do it themselves, which is a reasonable consideration. Just because you don’t have years of experience does not mean you can’t learn enough coding to build a functioning prototype. There are a lot of great tools available to get people started in putting something basic together.
- Find a friend – This can be a bit risky. Unlike family, friends might not be willing to forgive if your idea completely tanks. However friends who like to invest in ideas and new products AND are willing to accept risks in regard to their capital should be considered. Just make sure you treat any friend just as you would any other investor; with respect.
- Find a co-founder – For people who are able to raise some of the money needed, you might look for a co-founder who is willing to share costs in return for a piece of the pie. Something to consider about the co-founder concept, many people and firms are more willing to invest in a business that has more than one founder as it is felt that numbers equal legitimacy. Also if you have some money but lack technical ability, you might find someone willing to take on that aspect in exchange for partial ownership.
- Crowdfunding – Crowdfunding is one of the newer concepts in the world that is used to fund everything from movies to martial counseling. You can find plenty of app-centric crowdfunding sites that can turn a great business proposal into a fully backed project. In some cases crowdfunding might help you jump further down the road and possibly bypass using a VC firm.
The bottom line is that a great idea only comes along every so often. While it might seem daunting to turn an idea into reality, it can be totally worth it as many successful entrepreneurs will quickly admit. Now that you have a better understanding of what are the funding options for a mobile app, you have a bit more information about what it will take to get move from an idea to a finished product.