Get That Bread: 5 Effective Ways to Get App Funding
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Have an idea for a mobile app but don’t have enough money to create it? Read on to learn what you need to do in order to get app funding.
You have a great idea for a mobile app. You believe it’s useful and people want it.
That’s a good bet since there were 178 billion app downloads in 2017. By 2022, app downloads could reach 258.2 billion.
But, for your idea to become a reality you need app funding. No worries. This article explains five effective ways to find the money you need to launch your idea.
How Much Money Do You Need?
The first question is how much cash you need for success. The answer depends on your product.
A simple app with minimal functions costs less than a complex multi-platform app. Expect your app to cost between $25,000 and $250,000.
Let’s look at some funding options.
1. Self-funded and BootStrapped
A bootstrapped company uses existing money. It’s funded with your personal savings which gives you the most control. You have full ownership of your product.
You decide how much to invest in your idea. Is it a side hustle or a full-time job? It’s up to you to get enough money together to build your idea. You also bear all the responsibilities and headaches.
Bootstrapping is the fastest way to get down to business. Many startups are self-funded and stay self-funded.
If you like the idea of bootstrapping, remember there’s more to think about than creating the app. Once you have it up and running you need to let the world know.
Plan on spending more money, time, and effort on marketing your app once it’s built.
2. Get Funding From Friends and Family
Pitch your idea to friends and family in the same way you would to any other investor. Prepare a professional presentation that covers all questions and concerns.
Include projected expenses and earnings. Treat the transaction like the serious business deal it is.
If you go into business with friends and relatives be aware of the impact on your relationships. If you have worries, consider another option.
3. Business or Personal Loan
If you have good credit, you can apply for a loan from a bank or financial institution.
Give a professional demonstration of your business plan. Show the bank how your app makes a profit.
Expect to fill out forms, answer questions, and pay back the loan with interest. There may be a loan application fee.
The U.S. Small Business Administration has a microloan program that lends up to $50,000 to small companies. The average loan is around $13,000.
The problem with a microloan is it might not be enough for your Mobile App Development.
4. Private Investors
If your app is for a niche audience consider a private investor. Find someone in your specific industry.
Someone with a related business may fund your mobile app if it helps their interests.
The downside to investors is you trade a percentage of your company for the funding. You no longer have sole ownership.
Investor advantages include connections inside the industry, and shared responsibility for success.
5. Venture Capital Firms
There’s a lot of buzz about Venture Capital (VC) and entrepreneurs. Companies like Uber, Airbnb, Facebook, and LinkedIn used Venture Capital.
This method of app funding takes time. You must convince a VC firm your product is worthwhile with a top-notch pitch. There is a lot of competition. Not every idea gets funded.
A VC firm may change your original idea. This happens when they see a faster way to capture a return on the investment.
Try online lending platforms to build investor interest in your project.
Go Get Your App Funding
Now that you know the top five options, it’s time to secure your app funding.
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