Raising Funds for App Development: Strategies and Advice

The question of how to raise funds for app development is a common one, especially for those with a great idea who have already secured a development company. However, as stated by the initial comment, simply having a development team on board isn't enough. It's crucial to have a solid business plan and clear revenue potential to secure funding effectively. In this article, we will explore various strategies and advice for raising funds for app development while emphasizing the importance of a strategic approach.

Understanding the App Development Landscape

Typically, a development company that believes in your app idea would either work on it for a share of the profits or develop it on their own if they believe in the concept. Relying on a development team to charge you for their services can be a costly mistake. To effectively secure app development funding, consider alternative means such as finding a talented CS student or utilizing crowdfunding platforms.

Alternative Funding Strategies

Finding a TALENTED CS STUDENT

One of the most cost-effective ways to develop an app is to find a skilled CS student who can build it for you. This is not only less expensive but also comes with the added advantage of building a relationship that can benefit both parties. Instead of trying to exploit the student post-fulfillment, work together for mutual success. This approach not only helps you save money but also ensures quality development as the student is passionate about their work.

CROWDFUNDING PLATFORMS

If you believe your app idea has mass appeal and potential, consider crowdfunding through platforms like Kickstarter or Indiegogo. These platforms provide an excellent way to reach a wider audience and raise initial capital. By offering early bird rewards, you can generate excitement and secure funding for development. It's a win-win situation as you get the funds needed to develop the app and create a community of early supporters.

PERSONAL SAVINGS AND INVESTMENTS

Before reaching out to external investors, it's essential to have a decent amount of personal savings or financial support from friends and family. This not only reduces the financial burden on external investors but also shows a level of dedication and commitment to the project. Once you have a prototype or MVP, you can then approach angel investors or venture capitalists with a more robust business plan.

Building a BUSINESS PLAN TO ATTRACT INVESTORS

A bulletproof business plan is crucial to attracting potential investors. Outline your app's features, target audience, marketing strategies, and potential revenue streams. Demonstrate how your app aligns with current market trends and how it can generate significant returns. A strong business plan will showcase your understanding of the market and your ability to execute a successful business venture.

REAL-LIFE EXAMPLES

Understanding the success stories of other entrepreneurs can provide valuable insights. For instance, Business Plan Pro, a business planning software, was developed by offering a percentage of future revenue to the development company, alongside a small monthly fee to cover expenses. This approach eventually led to the software's success and sales of over 3 million units since 1995.

In another example, Tim Berry's Business Plan Pro, now known as Business Plan Pro, used a similar strategy to grow his software company. The story is detailed in this Quora question: How did Tim Berry grow Palo Alto software.

CONCLUSION

Raising funds for app development requires careful planning and a strategic approach. Whether you choose to work with a development team, find a talented student, or opt for crowdfunding, the key is to present a compelling business plan and demonstrate the potential for growth and profitability. With a strong strategy and a clear vision, you can increase your chances of securing the funding needed to bring your app idea to life.