Imagine waking up in the middle of the night driven to create an application that might sweep the digital realm! Suddenly, you understand you will need money to reach this target. What are the next steps, and how might startup investors help you realise your great idea?
Given that 88% of mobile time is spent on apps, more companies are showing a strong need to fund a seasoned mobile app development company.
Still, having a great app idea for your startup feels inadequate nowadays. To be a transformative force in the modern digital environment, the process of creating a startup application idea into an effective product requires a significant commitment of money, time, specialised resources, and the incorporation of digital solid transformation services.
How to Find Investors?
Business investors are always keen to invest significant funds in anything they consider to be thriving. This is attainable, but it requires a strong commitment. Thus, with this thorough guidance on funding your mobile app startup, you will be ready to draw in fresh travel investors and start realising your goal.
So, before presenting your startup plan to concerned investors, you should deeply engage in the background analysis. Before actually consulting investors, you must be aware of their viewpoint, which goes beyond just putting money into the travel business. Their main objective is to understand whether you have thoroughly researched the chosen idea. Hence, more than having a rough knowledge of the concept is required.
Moreover, the investors for startups want you to learn extensively about market trends so that you can explain how to stand against the contenders and outshine the competition.
List of To-do Items Before Talking to Travel Investors
Understand the App Market
Thinking about the smartphone's existence for a long time now, everything is managed via an application in this world. Investors are, therefore, reluctant to fund an existing app concept. Thus, you have to investigate to grasp the competitiveness of your app in the niche. It is vital to explore what other apps are offering to the audience and keep an eye on the enterprise offerings to stay informed about the concept’s uniqueness. You should be able to convince business investors about the modern idea and its influence on the world of digital media.
App Branding
After knowing what your application should do, you can start branding it. Creating a logo for your application shows investors your enthusiasm for the idea and the thought you have put into it. Branding helps investors for a business see your idea instead of only considering it. This also applies to your unique app concept since branding will define the direction of the whole growth process. Branding a project as having a defined domain, a site prototype, or an app model allows the investors to picture the app idea in a better way.
Elevator Pitch
Investors for a travel business are busy people, and you should have an elevator pitch ready well ahead of their considering a call with you. An elevator pitch is an overview of a firm and the app idea. This pitch can serve as a chance to make a strong connection with the investor that can be leveraged later. Though it is not always mandatory, one should be well-equipped for every outcome in which you can be asked to present an elevator pitch. If you need help explaining your concept in 30 seconds, you should perform a deep assessment. Hence, you should be able to describe your idea clearly to impress the investors while not taking much of their time.
Pitch Deck
A powerful pitch deck indicates you have given your idea much thought and are extremely serious about your startup app. Investors on the pitch deck want to see specific essential components, including the application model, SWOT analysis, marketing plans, ROI, target market, and potential roadblocks.
Generate a Minimum Viable Product
Making a prototype or a perfect copy of the app with a few features helps investors visualise your software's idea. Having a minimal viable product (MVP) demonstrates your dedication to making this app the next major trend. Moreover, it helps investors get recruited and lets them join you and experience your idea instead of only listening to your presentation. If you get the opportunity to offer a memorable experience, you should shed light on the upcoming challenges and issues. Irrespective of whichever direction you go, business investors will be happy enough to observe your efforts in bringing the startup app to reality.
Ways to Onboard Investors for a Business
Do you need clarification about captivating investors for your potential startup? Fear not! Here is a thorough list of key ideas for attracting the finest investors and securing app financing.
App Idea Funding Contests
Participating in one of the financing contests will help you readily get money for your app concept if you are confident enough about its novel possibilities. The contests are annually sponsored by reputed companies across the globe, along with angel investors. Some of the contests do not contribute to funds, while others are responsible for offering proper guidance. But if you wish to enter a funding contest, you should strategise for it meticulously. The major reason here is that gathering funds via a contest shows that you need to tackle opponents, sometimes up to a thousand or more. Nevertheless, being a part of the challenge can be a remarkable opportunity and a way to attract attention to the concept, even if there are chances of failure.
Attracting Angel Investors
Angel investors are the second choice most app businesses find intriguing now. Angel investors are individuals, and at times, companies, who leverage assets to guide the firms in their initial development stages. Undoubtedly, you need not repay the money the investors gave you for your idea’s failure. Most business owners seek out angel investors for this reason.
But if the concept is good enough to thrive, your angel investor will most certainly be an investor of yours. Depending on the amount of money angels offer you, they usually require between 10% and 30% of your shares. This suggests they will be qualified for a share of your earnings and have some control over your business.
Supporting mobile app entrepreneurs carries excellent risk for angel investors; presenting your idea to them may be challenging. However, if you can achieve that and are comfortable giving shares to a third party, angel financing for an app will enable rapid expansion of your travel app development company.
Personal Networking
Usually, family is one of the most consistent money sources before friends. People in your social circle believe in your abilities and support you most when you decide to follow a dangerous road.
You can persuade people to give you money with a great strategy and a compelling presentation. But convincing people you are in touch with is more straightforward than pitching the idea to a stranger. Furthermore, funding the concept via a personal network assists you in handling the hurdles with cost-effective initiatives.
Interacting with Private Investors
Private investors are the next answer on our list of mobile app financing sources. They are local companies operating in the app's intended target sector. Suppose you come up with a fresh idea for salon booking services. In this case, you can pitch to local managers and ask them to extend support for mobile app development to earn a competitive edge.
This is a top-notch substitute if the concept aligns with a particular niche. You can contact companies that secure funds to invest in the application but need an application for their business. In this case, you will likely get funded for your exclusive travel app development idea.
Releasing Crowdfunding Campaigns
Using crowdfunding sites will help you create a far bigger circle of people who share your kind of thinking. Networking will help your name and company reach many potential investors, boosting earnings. The marketing strategy of word of mouth and possessing some excellent apps can be a cornerstone of your achievement as a newcomer in the travel field. If you don’t have an authentic supporters’ community, now is the right time to start working on creating one with the aid of crowdfunding.
Hiring Co-founders
Another approach to raising money is convincing friends and family with strong financial backgrounds to serve as co-founders. This only occurs when they are sure your program can generate income. Some innovators also consider funding the starting phases of their firm by introducing a co-founder. It is a credible strategy, as the co-founder manages the complex tasks involved in an app’s launch and invests funds to escalate the app idea.
It is reasonable to deposit some of your own money to start your project, though, since convincing people to invest in your idea when you are just beginning is challenging. This initial money can be used to employ designers to create prototypes for your software, which can then be presented to investors for additional investment.
What are Funding Rounds?
Once you have identified the glitches and errors in the app idea as a startup app development company, you are ready to present it to investors. Most newly established firms experience different fundraising phases, and it is essential to determine the importance of fundraising iterations for the company.
Every investment round will bring fresh investors with different goals for where they want to spend their money. As development starts, these funding rounds allow your startup app to undergo various changes and benchmarks.
Fundraising Stages
Pre-Seed
Seed
Series A
Series B, C and beyond
Pre-Seed
In the pre-seed stage, a firm sets up the business and doesn’t consider raising funds. The round happens just before the seed stage and is used to create company products. Usually, investments at this level are somewhat minor. Business investors must assist businesses during their initial set of investments and seed phase.
Seed
This is where things take a turn, and newcomers in the travel business pull in the money required to thrive. This round is focused on the early development of your travel application development company; hence, total funding may range from $1 million to $2 million. Usually, the investors in this round who see the value of your firm and are ready to take a chance include angel investors, early-stage venture capitalists, and startup incubators.
Series A
If you have reached the Series A round, you are going right. At this stage, you should put in the effort into the company’s and product’s advanced growth. Series A funding allows a person to concentrate on advertising plans, business and product scaling, and corporate development. Common Series A investors with total investments ranging from $2 million to $15 million are venture capital firms, "super" angel investors, and significant companies.
Series B, C, and Above
Reaching Series B and above is a big achievement for you as a startup application development company. Series B completely depends on the business's expansion, including hard efforts or the team's growth. Venture capitalists and possible corporate investors Series B investments average around $24.9 million. Any more investment rounds will focus on publicising your company, looking at potential partnerships with other companies, or entering other markets.
Different Types of Business Investors
After you better understand the funding process and fleshed out the app idea, it is time to talk to the investors.
Crowdfunding
Crowdfunding generates income from vast groups of audiences via social media. Generating a thriving crowdfunding campaign demands a well-executed promotional plan. It includes establishing straightforward objectives, understanding the target clientele, designing an empowering campaign, selecting a reliable crowdfunding space, and executing a diversified advertising channel.
Equally significant is making the best use of personal networking, attaining milestones within a dedicated timeline, and regulating the strategy. Providing updates and interacting with supporters during and after the campaign assists in building long-lasting connections. These guidelines will help you maximise your chances of success in obtaining money and reaching your crowdfunding targets.
Angel Funding
Angel investors are influential figures in startup funding. They lend money to bright entrepreneurs in return for ownership of their enterprises. Before consulting angel investors, it is critical to create a flawless plan outlining the standard aspects of your startup. The plan should entice different elements, involving an extensive description of the app, its USP, market assessment, and analysis of the competitive landscape. The mobile app startup's strategic plan should precisely express your vision, mission, and long-term goals.
Venture Capital Firms
During expansion, new firms require financial assets to escalate their operations, create new goods or offerings, and take over a considerable market share. Venture capital firms are essential at this stage to provide the required funding in return for equity ownership.
Funding Contests
Engaging in-app financing events give entrepreneurs a great chance to present their first app idea to potential investors. Having a thorough marketing plan and a minimum viable product (MVP) in place will help raise the chances of obtaining money. An appropriately crafted advertising strategy should include deep market analysis, a USP that uniquely identifies the app, branding, a monetisation framework, a user acquisition plan, and a costing structure. At the same time, an MVP shows the software's main features and value proposition so that investors may see its possible influence. It is imperative to make a convincing presentation stressing the value proposition, market opportunity, business model, marketing plan, and the team behind the app.
Final Thoughts
Developing a mobile app that changes the digital world is an adventurous journey, but translating your dream into reality takes strategic planning, hard work, and capital investment. Investors for startups can make a huge difference in this makeover by providing money to bring your vision to life. It's imperative to understand the market, brand your app, and get an appealing pitch in order to attract the right investors. Looking through various funding options, including angel investors, venture capital firms, crowdfunding, and entering contests for funding allows one to pursue many avenues in the search for capital.
Keep in mind that securing an investment can be challenging. However, a good business plan with a clear value proposition and a minimum viable product will further help you explain your application and thus present its potential for differentiation from many other market entrants. Understand the market trends, work on your pitch, and then build a strong network to get every chance at success. Keep knocking with your pitch and follow an appropriate approach. You will be halfway to finding those investors who do see your vision and are ready to back up your app so that it turns into a digital sensation from that midnight inspiration.
