Look At Your Situation
Suppose you think you’ve got the best idea for a mobile app ever. Not only do you have a clear idea, but you’ve also taken effort to document it, define all the functionality details and even figured out the resources you need to reduce your development costs, such as APIs and SDKs. As a shrewd businessman excusing no time wasting and process complications, you’ve probably already found a reputable developer who’s pricing reasonably and is experienced enough to do the job for you. But after all the preparations you still have one and very big problem left - you have no money for building and marketing your app.
The normal behavior in this situation is to start seeking financial help at friends, family or some occasional acquaintance. However, not everybody is so lucky to come up with the necessary money in this way and you are likely one of such people if you’re reading this article. Still, after you’ve been refused at banks, for they “don’t give financial help to startups”, as well, it’s not yet time for desperation because you have at least two ways of acting in this situation.
You Have Two Options:
If you don’t have financial resources and family and banks don’t help, the next step should be looking for investors, or “angel investors”, as they are commonly and quite fairly referred to in the business of technology.
There is a number of great online services that can assist you in this far from easy task of finding investors ready to fund a startup:
- The Go4Funding and Angelsoft websites do a good job pairing up the innovators with venture investors ready to take risks on new products and ideas.
- LinkedIn can facilitate your investor searchings with its impressive database on businessmen and venture capitalists if you carefully organize the search terms for finding the right people via its search service.
- Inc.com is another site with a good list of investors and manual instructions helping you to go about the processes of finding, approaching and cooperating with the investors.
What’s the most important thing to always keep in mind when dealing with investors is that they are here to make money. Therefore, to justify your efforts put into the searching and negotiating with your investor in order to make them buy into your app project, it’s critical that you accurately define your project, prepare the documentation and, finally, hone your pitch long before approaching them. That is because your goal during the negotiations will be to sell them on the idea they get an exceptional chance to make money on your app.
If you are not sure in your power of persuasion or just don’t have great profit expectations from your app that could attract investors, the second funding option for your project to try is to arrange for a revenue-sharing agreement with your developer. As experienced app developers get dozens of such proposals every month, your proposal has nothing to do but be really of exclusive value. Either you have to offer a promising potential revenue stream (just like in the case of investors), or you need to have attractive development prospects that would cater for a developer’s area of expertise and make your project valuable for them from a professional point of view. The developers usually take share of your future revenues and agree to the reduced development costs in exchange which makes your initial budget fit better.
Unfortunately, attractive as it may sound, many developers, however, don’t even consider such a possibility and those who do refuse more proposals than they usually take.
But You Need to Have Answers to Important Questions
However beneficial a course of events may develop for you in a search of partners and investors, you won’t do without answering some important questions your potential partners are sure to be interested in:
- What value proposition have you got? How is your project to serve customer needs? How are you going to make customers willing to pay you for that?
- What is the size of your app’s potential market?
- What is the process of your mobile app monetization like?
- What initial and ongoing expenses are expected?
- What are the details of your marketing plan?
- What kind of competition does your app have currently? What changes are expected in its status over time?
As answers to these questions will influence your potential investors’ decision, you need to do a good preparation on those. A good news for you is that multiple blogs and forums demonstrate that an amazing number of startups seeking investment are unprepared for these questions. Thus, answering the key questions will automatically boost your chances for investment success against the rest of investment seekers.
And Then You Will Succeed
As you can see, there’s always a way to go. The only difference between success and failure is how hard you try.
With the above-mentioned questions properly answered, you may relieve from the fear of your conversation with a prospective investor being short, because a compelling smartphone app idea with a clear value proposition, profitable potential market, reasonable operating and development costs and a strong marketing plan together promise big chances for realization of any dream project, and are almost for sure worth the invested money for any business capitalist.