Mobile App Blog of the Month

Mobile App Funding: Guide to Raise Money For Your App in 2022

Mobile App Funding: Guide to Raise Money For Your App in 2022

It is no doubt that technology became a part of our everyday lives. Devices like smartphones and tablets are now considered essential for some. This is also true for businesses, as most are now depending on the new technology and even jumping on the bandwagon by creating their own mobile apps.

There was an online video ad from a Middle East-based brand, that emphasizes how apps became a way of life for some. The husband in the ad says “There’s an app for that!” whenever the wife asks to do something. If you haven’t seen it, you’ll realize that the possibilities are endless with apps.

Probably, you could already have the idea for the next big app. After a little research, you might have been discouraged about the cost involved in creating them. Don’t worry – there are a couple of ways how you can kick start your app financially.

1. Through an angel investor.

If this is your first time to hear about them – Yes! - they do exist. Also known as private investors or seed investors, they are usually high-net-worth individuals who offer financial support to small businesses or entrepreneurs in exchange for stock or shares in the company. It does not necessarily have to be a well-known person, friends, and family members can be angel investors too. Angel investors may make a one-time investment to assist a startup or business to get off the ground or provide continuous funding to support and sustain the company through its early phases.

Many consider approaching an angel investor to be one of the easiest ways to get funding for your app. In case you found one who is interested in your proposal, make sure to have the complete details. It may include (but is not limited to) the total amount needed, how it will be spent, strategy when entering the market, future developments, and how the app will be promoted before and after launch. Don’t forget to include a part that elaborates why you deserve the much-needed funding.

2. Venture Capital or VCs.

Investors offer venture capital (VC) to startup enterprises and small businesses that are believed to have long-term potential development. Like angel investors, venture capital may come from well-off investors. However, it could be from other sources as well such as financial institutions or investment companies. It is important to note that venture capital may not be in terms of financial support, it could be through providing technical or assistance services.

The service is becoming popular with new companies or tech start-ups that do not meet the requirements of banks and other financial institutions. For this source of funding, investors would usually ask for equity in the company. Due to this, they may have a vote when it comes to having company decisions or having control over the development of the app.

3. Bootstrapping

If you are wondering about the term, its origin is believed to be around the 18th or 19th century from the phrase “to pull oneself up by one’s bootstraps.” Bootstrapping refers to those who build the business or create an app with their own source of financial support. This does not solely mean savings – it could also be from loans and another possible source of funds under the owner’s personal name. Nowadays, the term ‘bootstrapping’ refers to making something out of nothing. Looking for a co-founder could be possible too, pooling your everyone’s resources to fund your app creation and development.

4. Crowdfunding

The use of small amounts of funds from a large number of people to support a new business initiative (or your app concept) is known as crowdfunding. This concept is usually done through different social media platforms or through websites dedicated to crowdfunding. There is a potential expansion of funding as angel investors or other interested entrepreneurs can join the event.

Honestly, there are plenty of apps that are unnoticed on different sites that host crowdfunding. The platform may also serve as a forum to showcase your app with potential investors. Websites offering this service may also deduct a percentage of the donated amount, which serves as their revenue.

5. Business incubator.

A business incubator is an organization that provides a broad range of services to help startup firms and individual entrepreneurs grow their enterprise or business venture, usually starting with management training and office space. It often ends with a venture capital investment. This type of funding for businesses is believed to have started in the 1950s. Through the years, business incubators have evolved to different programs and variations.

The only difference between a business incubator to the other types of funding in this list is how it meets the specific need of your business. For example, if your app would require a number of employees in order to operate smoothly, they can assist with mentorship or training. In general, you can continue in an incubator for as long as it takes for your app to reach a sustainable level of growth.

In comparison

Working on your own could be a challenge, but funding your app with your own finances ensures that you have complete control with regard to its management and development. However, not everyone can afford to fund the app for themselves. If you are open to co-managing or sharing the app idea with other possible investors, the other sources on the list are a great way. Just be reminded that in exchange for the pooled funds, investors may ask to have a say on decision-making and profit-sharing.

In recent years, there is a growing number of ways how to fund your app. Many of the popular apps we are using today required significant funding just to be launched, such as Mark Zuckerberg’s Facebook. Once you figured and received enough funding, it is time to find a suitable marketing or app development company that can put the idea into life. The best one can provide great service from conceptualizing, launching, and future developments.

To help budding entrepreneurs start their mobile app idea, Emirates Graphic recently launched the App Prototype offer that will allow you to showcase the best features of your app idea through a live prototype. This will allow you to visualize, validate and present your mobile app idea to potential investors. 

Sacha Christe

Now is the time to start your app!

Let's talk about your Project

Blog subscribtion