How to get investors for your mobile app startup?
Are you a new startup trying to find out ways to grow your business? Or are you looking for ways to grow your existing mobile app business?
You might need a good investor, right?
Your business may be great, and your mind may be really creative, but is that what is enough for setting up a complete startup?
Developing products, doing marketing, conducting market research and so on requires time-to-time funds in order to execute all in a seamless way.
But finding the right investor brings a big challenge. Getting investors for a mobile app development company can be a challenging process, but there are several strategies that can increase your chances of success.
Additional benefit Beyond money, an investor can add value to your company. They are motivated by your company's success. Investors might offer their capital, knowledge, contacts, and resources.
If you are someone new to the funding process, then this blog will help you in understanding the types of investors, funding stages, and ways to attract the right investor.
Types Of Investors: Complete Overview
1. Angel Investors
Angel investors are the ones who have their own established businesses with very good net worth, plus they have invested in many startups and big businesses. Angel investors, also known as business angels, majorly help new startups in growing their businesses. So if you are new then have a strong base and there are high chances you get an angel investor giving you the needed funds at a good value.
2. BootStrapping
"A person is said to be bootstrapping when they attempt to establish and grow a business using their own money or operating revenues."Bootstrapping entails a financial squeeze but gives the creator or founders more authority over their business.
3. Family & Friends
One of the simplest and most easy ways to get funds is from our own family and friends. Businesses can try taking funds from their own relatives and friends. It’s not always possible that your close ones are able to provide you with all the needed funds, but is a good place to start the journey to getting the right investor.
4. Crowdfunding
One of the most effective and cost-friendly ways to raise capital is by spreading awareness through various websites and social media platforms. This type of investor does not include banks and financial institutions. They can be your family, friends, or beyond this.
5. Venture Capitalist
A venture capitalist is a type of investor who will only fund a company or corporation if it has a growth strategy or a concept that has the potential to be very successful in the future. A venture capitalist will be the first investor to put a significant amount of money into a business if it exhibits evidence of future rapid growth by acquiring an equity stake.
6. Banks & Government Agencies
There are many government programs that provide funds to many businesses and startups. These aren’t true investors but have a look at the programs they offer, and if it fits your business domain, then you can get a good investor. Banks can provide loans, credit cards, and other helpful services that can help your business grow.
Funding Stages
1. Pre Seed
This is the first and foremost stage of startup funding. This is the time when the founders want to bring their mobile app startup idea into execution. Self-funding, financial support from friends and family, and business pitching events are the most typical pre-seed fundraising sources. Many founders try to bootstrap their startups. This is one way to hold the major business power in your hand. Founders utilize their own savings in order to fund their startups.
2. Seed
Seed funding typically comes after the pre-seed stage, when the startup has a more concrete plan for its product or service and is looking to build its team and begin executing its strategy. Seed funding can come from a variety of sources, including angel investors, venture capital firms, and crowdfunding platforms.
3. Series A
After the seed stage, a company may seek additional funding in a Series A round. This round is typically led by venture capital firms and is intended to help the company scale its operations and grow its customer base.
The investors in a Series A round typically receive equity in the company in exchange for their investment. The terms of the investment are negotiated between the startup and the investors and may include provisions, such as liquidation preferences, board seats, and anti-dilution protection.
4. Series B
In a Series B round, the company is often looking to expand its market reach and establish itself as a major player in its industry. This round typically involves larger investments from venture capital firms and may also include participation from strategic investors.
In this round, investors may also be interested in seeing more established financial metrics, such as revenue and profitability. The company's valuation may also increase significantly from the Series A round, which can result in a larger equity stake for the investors.
5. Series C
As a company continues to grow and mature, it may seek additional funding in subsequent Series C, D, and E rounds, and so on. These rounds typically involve even larger investments and may include participation from institutional investors, such as hedge funds and private equity firms.
Series C funding is typically led by institutional investors, such as private equity firms, hedge funds, or sovereign wealth funds. Venture capital firms may also participate in this round, depending on the needs and goals of the company.
What are investors looking for in a particular mobile app?
1. Unique App Idea
Are you still wondering what’s the first step to get your investor's attention?
No investor wants to fund a company that presents an outdated idea or application. So how can you create a difference? Well, try to research well on the pain points of the current customers, and create an idea that can help your customers in some way or the other. If your app idea is unique, then your investors will be happy to provide the needed funds.
2. Domain Knowledge
Your investors will not only look for a great idea but also will consider your knowledge about the same. They want to make sure that your idea is developed from your skill set and that you have the required knowledge to make innovation and dynamic profits in the same.
Make sure you are ready with your idea and the needed knowledge about why you want that particular idea to be implemented and how it will benefit you in the future.
3. Effective Business Model
Your app is what makes your investors trust you. If the idea and thought process behind having such an app is logical and creative, then who doesn’t want to invest in your application? Have such a business model that is presentable, logical, effective, and profitable in the future.
4. Create a Sales Pitch
Investors are dynamic individuals; as a result, you must have a sales pitch for your company that functions as a customized interview before they will even consider setting up a meeting. The greatest approach to meeting funders, for instance, is at a networking event.
Having a good sales pitch not only shows your confidence but also helps investors build trust in your mobile app business. Good pitches gain investors' attention and get huge funds in a quick way.
5. Market Knowledge
For any business, whether small or big, the owner or founder should have knowledge about the ongoing market, demand, potential customers, pricing, and a lot more. If you are aiming for investors to provide funds for you, then you should be prepared with the needed market knowledge of all the latest happenings and the future results of the app.
After the Funding Process
It’s not the end!
After receiving investment, it's crucial to create a growth strategy for your firm. You can concentrate on the corporate objectives that must be met in order to maximize the funding that has been provided to your startup with the aid of a strategic growth strategy.
Now the main process will begin. If your app is not launched, then try to make improvements and modifications as per the latest trend and client requirements. If your app is already launched, then try to analyze customers' feedback and try to make changes as per the demand of your target customers.
As your business grows, you will get more opportunities to receive funds. But what to do with it?
Well, funds are never more, but the right use of funds can make your business reach new heights. You can utilize these funds by adding more features to your app, changing its design pattern, adding easy navigation, and a lot more.
But how to keep track of whether your app is working properly all the time? Hire mobile app developer to make sure that your app is always in a good state and is free from bugs and errors.
Overall, the funding process is just the beginning of a startup's journey toward success. By allocating the funds strategically, building a strong team and culture, tracking progress, communicating with investors, and preparing for future funding rounds, startups can achieve their growth goals and achieve long-term success.
Conclusion
Proving that your mobile app idea is right for the investors is a big challenge, but once achieved, it can turn out to be a huge success. Finding the right investor is tedious, but with the right steps and technique, you can grab the investor's attention and can crack a great deal. Many businesses fail due to improper funding and because they could not find the right investor. Getting investors for your mobile app startup takes time and effort. Be persistent and continue to refine your pitch and business plan until you find the right investor who shares your vision for success. Want to develop an MVP for your application to gain your investor's attention? Protonshub will give you the best MVP development services at less cost and by employing the right talent.
