A mobile app startup is a creative process of transforming ideas into workable and usable software—apps that can adapt to various or specific tasks.
It’s the actual turning of ideas into practical function apps to perform a range of functions. With the advent of COVID-19, there has been a thaw in the app creation process.
Yet, more than ever, apps are in high demand and can help solve critical human needs and challenges. Mating the app is one challenge, and raising funds to transform it into an actionable idea is another.
8 Ways To Raise Money for Mobile App Startup
So, for a mobile app development company, with all the negativity and recession in business because of prolonged quarantine and lockdown periods, what can raise money for a mobile app startup?
These are some common market and private strategies to get money for that app startup running.
#1. Crowdfunding
Crowdfunding is one of the most common ways to raise funds for an app startup. Crowdfunding means a group of investors fascinated by the app agree to back up or support its transformation into a full-blown app or piece of software.
Crowdfunding the app is going to attract many investors at the same time as pitching the idea. Everyone agrees or offers, in principle, a certain amount of money via the Internet or social media platforms.
Many crowdfunding sites help innovators pitch ideas and apps to interested investors, both single and institutional.
These funds come in various forms, like donations, funds traded for rewards, or shares in the business venture.
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#2. Business Bank Loans
Loans have been, still are, and will always be a source for innovative app startup funding. However, winning the confidence and trust of most lenders largely depends on how practical and actionable the app ideas are.
Loans for small, medium, and large-scale businesses are easily funded as the business is stated and security is derived or given.
The easiest way to gain business bank loans is by placing property as a loan guarantee. Banks and financial institutions demand assets as loan guarantees to raise app startup money.
Besides, supportive government measures include startup financial aid with low-interest rates, investor tax benefits, etc.
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#3. Venture Capital Firms
Venture capital investments constitute a large chunk of how to raise app startup money. Venture capitalists are always looking for fresh, promising, and actionable ideas that will be money-spinners, and it’s all about multiplying their investments.
Although high-risk financing is involved, venture capital also plays a key to ensuring the investments work out well and the project or app startup is a success at all costs.
The catch is usually that venture capital firms may demand equity in exchange for funds, especially if the app startup promises success.
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#4. Best App Contest
App startups may be tested on various parameters, especially at tech summits or contests. Tech and innovation app contests from various companies, institutions, angel investors, and other investment platforms.
This motivates and discovers actionable app ideas to fund the app software development process fully.
Winning ideas get fast access to full app startup funding. As seen from this experience, app startup funding has a multidimensional approach.
Read: How To Get Best Mobile Apps Development Ideas
#5. Angel Investors
What are angel investors, and how do they help app startups get the required financial resources?
Angel investors are high-net-worth individuals with excess capital to invest in business opportunities.
They invest capital with less control and trade for the capital infused, unlike venture capitalist investment.
#6. Business Partnerships
For a long time, business partnerships have easily aided app startups in many ways, with their huge customer base, innovation opportunities, and adoption of new technology to accomplish tasks.
Business partnerships help promote the app extensively to other business customers. This makes the app instantly reach a wider audience with immense investment opportunities or markets.
However, business partnerships must be negotiated clearly, and everything must be signed in legally binding clauses to safeguard both parties from future complications. This is essential in all business partnerships.
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#7. Bootstrap Funding
Bootstrap initially funds the app startup and later seeks investments in the business.
The initial stage provides innumerable advantages like absolute control of the business, administrative direction, planning and execution, finance and expenditure monitoring, etc.
This guarantees proper investment fund flow practice early in the app startup’s development. Bootstrap funding is a strict regimen that requires strict fund monitoring initially.
#8. Business Grants
Business grants for small and medium-scale startups are still very plausible investment routes. Well-planned apps for cross-sectorial business interest, including government funding.
With several small and medium business grants available, app startups, especially those with social impact, may find easier access to funds.
Grants are usually given for free as a motivating endorsement of the app idea. Grants require a demonstration proving the app’s claim is a true game-changer in any social cause aspiration.
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Attending industry events, startup competitions, and pitch competitions can also provide exposure and access to potential investors. Exploring funding options such as angel investors, venture capital firms, and crowdfunding platforms can broaden the possibilities.
Crafting a well-designed pitch deck that showcases the app’s features, benefits, and market differentiation is essential for making a persuasive case to investors.
Finally, building a strong team with complementary skills and expertise instills investor confidence in the startup’s ability to execute the app’s vision effectively.
Summary
Like any innovation prepared by any mobile app development company with meticulous attention to detail, funding mobile app startups can be challenging.
However, with the right combination of strategy and technical planning, we can easily achieve mobile app startup funding and fascinating success.
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