Let’s say that you have an idea for an app that you just know has a great chance of gaining a slice of the mobile market. Maybe you’ve validated your app idea by demonstrating a want or need for its features in the mobile space. You even went ahead and performed a full market assessment of the competition in your niche to see what they’re doing right, and what they’re doing wrong.
And still, all you can see is opportunity waiting at the virtual doorstep of the App Store.
But then you realize that you can’t find a development team that’s willing to work with you based purely off of the perceived future equity of your app.
However, the opportunity to build this app is too great to pass up, so you know in your heart that you have to figure out how to fund your dev team in order to make this thing happen.
And the great news is that it’s more than possible to get all of the funding that you could ever need for your next app business. You’ll just have to determine your tolerance for risk and the likelihood of success first.
There are three general routes to take into consideration when turning your next app business idea into a reality. We’ve been there before, and have laid out all of the details for you.
1. Bootstrapping and Crowdfunding:
Bootstrapping is the optimal way to fund your idea because you’ll be generating money that you generally won’t have to pay back. This can be a key strategy for fundraising. The riskier the venture, the more likely you’ll want to bootstrap.
If you decide to bootstrap then it will be time to hustle. Making money in any way that you can is ideal when you’re likely attempting to raise $3,000 to $10,000 for your app. Writing web content, designing graphics, selling t-shirts or doing whatever’s necessary to raise money for your app fund will be extremely important. You can even ask friends and family to donate to your cause.
Crowdfunding is similar to bootstrapping, but the rules are a little bit different. When crowdfunding, most of your time will be spent preparing and marketing a web-based campaign to raise money (think politics) rather than working odd jobs yourself. You’re essentially dedicating all of your efforts towards proving to the public that your app either solves a problem, or provides them with something of value. They’ll then (hopefully) give you their money in exchange for an advanced copy, perks or a premium version of the app once it’s released. You can check out Kickstarter or Indiegogo if you’d like to utilize the largest crowdfunding platforms in the world. However, AppStori is the most popular app-specific platform for raising mobile start-up capital.
2. Incubators and Start-up Accelerators:
App incubators and start-up accelerators will provide you with the seed money that you so desperately crave if you’re accepted into one of their highly-selective program’s – but at a cost. They’ll typically take away a significant chunk of your app’s equity.
However, this can oftentimes still be well-worth the exchange, especially if you’re working with the Y Combinator or Techstars. A good accelerator can help take your venture from amateur-level to playing in the big leagues.
In exchange for some of your app’s equity, an accelerator will also usually provide you with professional guidance, mentorship, Wi-Fi access, computers, and various other resources (sometimes even food and shelter).
3. Angel Investors, Venture Capitalists and Loans:
These three major sources of debt financing and/or equity financing will provide you with the cash that you need at an occasionally large price.
But many people who are raising money for an app may simply want to seek out a small business loan for quick financial juice. This is often done through simply using a credit card (we can’t recommend this method but it is how Tim Ferriss and many others have launched their first successful venture).
Optionally, you can ask a representative from a local credit union or bank for a loan. They’ll usually require a proven, low-risk business model that’s almost guaranteed to work. So bring your best business plan along with you!
Business angels and venture capitalists are also excellent financial sources for funding large-scale apps with massive potential. So if you’re aiming big, then we absolutely recommend meeting with professional investors.
Overall, if your app appears to be a promising opportunity for the future, then funding your next app business honestly shouldn’t be a problem.
You may have to hustle to fund your own idea through bootstrapping if it comes down to it – but that’s absolutely okay. You might have to work night shifts or pick up odd jobs at 5 a.m. in the morning. But it will all be worth it in the end when your app business comes to fruition. Or, you could always crowdfund your idea if your app seemingly provides a wide array of value to the masses. Tech consumers love supporting ideas that add value to their own lives.
If you have big dreams for your next app business and believe that it will become a high-profile project, then you might want to think about seeking an investment. Your local bank or even an angel investor from down the street could provide you with a loan which may be exactly what you need to get started with your next app venture.
Regardless of how you get funding for your next app business – the most important decision that you can make is to take action today and make it happen.
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