You have the best mobile app idea anyone ever had. You documented the idea, defined its functionality in excruciating detail, took the time to understand the resources available to reduce costs (like SDKs and APIs), found a reputable, experienced, and reasonably priced developer, and you’re ready to go. Only problem is … you don’t have the money to develop and market your smart phone app.
You asked friends, family, and the occasional acquaintance. No luck. You were turned down by your bank (“we don’t finance start-ups”). Don’t yet despair. All may not be lost.
Find Investors
If self, family, or bank financing is not available, your next option is to seek investors, which in the tech business are commonly and appropriately referred to as “angel investors.” Websites like Go4Funding and Angelsoft pair up innovators with venture capitalists willing to take a risk on ideas or products. A LinkedIn search can likewise prove to be a valuable resource if you organize your search terms carefully (“mobile application,” “angel OR investor OR venture+capital OR partner,” for example). Inc.com has a list of angel investors, as well as a guide with instructions on how to go about finding, approaching, and dealing with investors.
The most important thing to remember, however, is this: investors are in business to make money. To have the best shot at getting them to buy into your mobile app project, you must define your product, diligently prepare your documentation, and hone your pitch before approaching them. You must sell prospective investors on the idea that you have an idea that has a very good chance of making money. This will involve answering, for you and for the investor, some really hard questions like:
- What is your value proposition? What need does your project serve and will customers be willing to pay to have that need fulfilled?
- How big is the potential market for your mobile app?
- How will the app make money? [See our post on how to monetize a mobile app.]
- What are the initial and ongoing costs?
- What is your marketing plan?
- What is the current competition and what is the competition likely to be?
We’ve spent considerable time scrolling through the blogs and forums, and the number of investment seekers who have not even considered answers to these questions is staggering.
Share the Wealth
Another funding option for mobile app development projects is to enter into a revenue-sharing arrangement with your developer. An experienced app developer may look at dozens of app proposals a month and will generally have a pretty good feel for whether your idea will have legs. If the potential revenue stream from the app appears promising, the developer might consider taking a share of future revenues in exchange for reduced development costs. Although this may sound attractive if you can’t find any other source of funding, you should know that many developers will not even consider rev sharing and those that do turn down many more rev share proposals than they take.
We deal with dozens of developers every week in our business. We hear hundreds of ideas every month. If you have don’t have clear answers to the questions above, expect any conversation with prospective investors to be short. However, if you have a compelling mobile app idea with a defined value proposition, a profitable potential market, reasonable development or operating costs, and a solid marketing plan, you may realize your dream project – and it will almost certainly be worth the effort.
Do you have some ideas about how to fund mobile app development costs? Leave a comment or e-mail me.
I like this article, but whats to stop someone from taking your idea? I’ve been a part of a startup and people do some under handed things…
Thanks for the comment! Disclosing your idea always carries a risk, but the risk can be managed. Check our post on how to keep someone from stealing your app idea. http://bit.ly/jNAlLV We also have a few posts about non-disclosure agreements that you might want to check out.
Thanks Mark. I need assistance in marketing my amy app .
Hi, I will fund decent app ideas. You will make a fee for the idea and % of the income.
Submit a general outline and cashflow model, let’s see if it has legs.
Liam
Hi Liam,
Email me your contact details, i have an idea to pitch but wish to discuss your intro fee and income % figure
thanks
Gary
garygroves@hotmail.co.uk
Hi there,
I do have a few mobile application ideas, do you have a non-compete or disclosure agreement?
Thank you and I look forward to hearing from you.
Jarrod
Hello,
I have a complete business plan, whereby I am looking for funding. Please can you send me the relevant contact details.
Regards.
If you have an idea and find an App in the US market for instance that is very similar to your idea; would it be possible to license their App and then modify it or would it be best to start from scratch?
The best way to protect your idea is to make it opensource.
i.e free for all to view
I have an idea for a bed – I know there are alot out there,but mine cater for low income families. I need help from beginning to finish. Anyone out there interested?
Hi Liam. Could I get you contact details too? I have a killer app idea with designs, storyboard and development plan.
Jack.adamson1@gmail.com
I beleive i have a great idea for an app for the iPhone, and not just iphone but for all
Smart phone. So my question is how do I keep my idea from being taken? Second I have done a lot of research and no one has come up with an idea like mine maybe you can give me some steps on what to do.
Thanks
Kenny
Kenny – with regard to protecting your idea, you might want to see our blog post on how to keep someone from stealing your app idea. If you’re ready to talk to some developers about coding your app, just fill out our quote request form and we’ll get you started.
Mark