Getting into the mobile app market can be a smart move, but investing your own money in your app project isn’t. So how do you find the funds to hire the best team of developers, creatives, and leadership that will ensure your project is a success? After all, building an app can cost thousands. Trust me, you don’t want to be footing that bill.
A huge component of tapping into the app market is about raising money and finding investors who can get on board with your project and help fund it. In this article, we’re going to review how to get investors for your app and how doing so can mean life or death for your project.
If you’re unfamiliar with the world of investments, started getting familiar. If you want a chance at getting some serious investor money in your pocket, you need to know the basics. This includes things like terms of investment as well as the different types of investors there are. Let’s take a quick look!
These are five of the most common types of investors for startups that you might want to think about.
Personal Investors: A personal investor would be someone like a friend, family member, or an acquaintance who can invest some money in your project. This can help especially in the beginning when you’re first scrambling to get some funding. Just keep in mind that there are some legal limitations when it comes to money accepted from personal investors.
Below is our video on how to get investors for your app:
Before you even think about approaching investors, you need to perfect your elevator pitch. Investors won’t want to hear a lengthy monologue about your app. Your pitch should be something you can deliver to someone in the time it takes to ride an elevator and that clearly describes what your app is, what it does, and why people will want to use it.
Practice and recite this pitch over and over. Use friends and family to practice on until you get to a point where they have a clear understanding of your app. Perfecting your pitch will come in handy when it comes time to speaking and emailing potential investors.
While it may be tempting to run out to investors and pitch your app idea with nothing but a great elevator pitch, slow down! Show investors that you’re serious by having some solid branding in place, such as a snazzy logo and even a website or landing page.
This doesn’t need to be the final branding and you can always go back and modify, but by bringing some branding to the investor’s table, it’ll help legitimize your app and set the tone.
Aside from putting together some branding for your app, having a pitch deck can also go a long way when pitching to investors. While you’re still in the early development phase of building your app and might not be able to have an interactive demo of your app ready, a pitch deck is the next best thing.
Here is an example of Uber’s pitch deck. As you can see, their pitch deck is nothing fancy in terms of design. It does, however, do a great job of illustrating primary points and data.
So now that you’ve worked a bit on your branding and have something to show to investors (along with a great elevator pitch!), you’re ready to start approaching investors. Here is how to start finding the right people to invest in your app:
Start networking and rubbing shoulders with others in the industry—you never know who you’ll meet. If you do some searching on social media platforms like Facebook or even meetup.com, you’ll find plenty of networking events geared towards entrepreneurs and startups.
Just be careful who you talk to as there are many “faux investors” ready to offer you questionable deals. It’s best to approach known entrepreneurs and have them introduce you to legit investors in their circle.
When it comes to finding investor money, remember that you’re selling a product. When it comes to sales, the number one lead with the best conversion rates are referrals. Unless you’ve created a tremendous amount of buzz around your new app and investors are knocking at your door, the best kind of lead is a referral.
To get referrals, turn to family, friends, and close acquaintances. People in your network are bound to know someone, so don’t be shy—ask for an introduction.
It also doesn’t hurt to ask the investors you speak to if they have any referrals for you, even if they’ve turn you down themselves. It doesn’t hurt to ask! Just because you aren’t a fit for them doesn’t mean you aren’t a fit for anyone.
Reading articles, blogs, and reports is a sure way of finding potential investors. These kinds of write-ups are very likely to contain names of entrepreneurs and investors, or some other useful information related to the app niche.
Once you gather the names of some investors, start sending out emails or even calling them up. Just remember that while it’s ok to cold call or send cold emails, you don’t want to send a generic email to all of the investors at once. You should do some background research on each of them, look at their portfolio, who they’ve invested in, etc, and send a personalized email.
Get used to hearing the word “no”. When it comes to shaking investors down for money, you’re going to get rejected a whole lot. The key is to not get discouraged. There are tons of investors out there that you can approach, so don’t sweat it.
Instead, use these rejections as an opportunity to gain some insight as to how you can improve your pitch to investors and what could have been better during your presentation. Were you able to answer all of their questions? Did you stumble in your delivery? Were you able to capture your audience’s attention or did they look bored and uninterested?
Asking yourself these kinds of questions after every investment meeting—especially those which don’t go well—will help you improve.
Raising capital is no easy feat and it can take months to find investors willing to fund your app. It’s all about having some hustle—that is, being able to network, rub shoulders with people in the market, cold call or email, and being able to effectively pitch your app to investors. Basically, it’s going to take time, people skills, and a whole lot of perseverance.
The first step is to read up on investment basics. Review common terminology and the types of investors out there so you’re prepared. Put together a compelling pitch and supplement it with a pitch deck that will sell your product to the people who have the power to fund your app. Reach out to people in your own network—this means contacting family, friends, and acquaintances to see who they know and who they can introduce you to.
Above all, don’t give up! Expect to hear “no” far more than “yes”, especially in the beginning, but use it as an opportunity to improve your sales pitch. Remember that practice makes perfect, and while this may be your first rodeo, you’ll learn quickly!
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