As per the Economic Times survey, around 14,000 new startups were recognised in 2022. That gives a whopping projection growth to India’s GDP and makes it the third unicorn globally after US and China. It is almost up 20 times in five years just for India. So, imagine the pool of opportunities a startup has globally?
Chances are you must be one of the startup owners with an evangelist or a revolutionary startup idea, and that lead you to this blog. If you are a mobile app development company, this blog can help you with your questions about how to get investors for your mobile app startups.
We have made sure that we discuss steps to gain investors’ trust. We have also talked about the elevator’s pitch and sales deck considerations. Furthermore, we have discussed different types of investments and the stages that any mobile app startup can acquire in today’s world.
So, let us first talk about how to gain an investor’s trust.
9 Steps to Gain Investor’s Trust
We know that you might be wondering how you can see whether you have checked all points to gain the trust of your prospective investor. Read these steps and make sure that your investors have the first good impression, and raise the fund for your innovative mobile app development.
Validate your app idea:
Make sure your app solves a problem, and no copy of it already exists in the market.
Find the right market:
It is crucial to research market needs thoroughly. Get a clear idea of your target audience and market segments. Study your competitor’s weak points that your app is going to solve.
Define app market size:
Another critical point to consider first. You should be ready with the current statistics and count that your mobile app will serve to audience. Your investor should know what the scope of your project is. They might come up with these questions.
Choose an app development company:
Some very professional mobile app development companies can help you forecast your mobile app budget. This would help you understand the investment cost, and you can present the right numbers in front of your investors.
Know the investment basics:
Learning the basics of what investment is all about is an important step. You must know the stages associated with funding, i.e., how to utilise the raised capital effectively to run your startup cost-efficiently.
Figure out revenue strategy:
This step is the most essential of all. A transparent revenue generation model for your business will help your investors understand that you have a clear vision of what profit you can accumulate with the current business idea.
The Minimum Viable Product is the actual product in its most compact form. Create an MVP for your mobile app idea with its most critical feature. Test it and then present it to your investor. This will help your investor get a real-time feel about the product you are talking about and will be confident enough to fund you instantly if they like what you offer them as a service.
Brand your App:
Marketing your app in the funding stage will benefit you greatly. With the defined colour codes, logo, and your company philosophy, you can give the exact feel of what it will look like after its completion and how much impact that will create on its consumers. So, add branding and design to your mobile app and see the mobile app investor gaining trust in your product.
Create a compelling elevator pitch for your startup:
A vital part of getting your mobile app startup investors is to present your startup sales speech, commonly known as an elevator pitch. Once your prospective investor is interested, it is easy to communicate more ideas and plans with them. As the name suggests, the elevator pitch should be brief, to the point, precise, and crisp while delivering the vision of your product in the first meeting itself.
After that, you can catch and grab the bird with continued communication. You get the opportunity to talk to the leadership team if you are persuading influential executives. They can help you move the ladder up with the leadership team.
But in case you are not aware of how to create an elevator pitch or its importance, we have dedicated a segment hereunder. Read on and create one today to achieve your goal!
Why does an elevator pitch matter to influence an investor?
An elevator pitch is an abridged version of your sales deck. Precisely, less than 2-3 minutes. Yes, that short and crisp! This was a continuous approach from the middle of the 20th-century when startups used to catch potential investors in an elevator. By the time the elevator rises (or move down) to reach its destination, they used to grab that opportunity and try to crack a deal with the investor.
In just 2 minutes, they needed to ask for financial help as it was the only opportunity to attract investors. No wonder the same approach still works! So, what important points you must take and ponder while preparing and delivering your mobile app’s elevator pitch?
Here are a few guidelines:
- Use convincing words that are easy to understand and drives impact.
- Positive and enthusiastic body language while communicating.
- You can not show a graph or pie chart in your first meeting, but it is always good to have a hard copy of it in case the investor asks for one to give a glance later on.
- Always create an electronic version of your pitch deck and keep it in paper form with a few copies.
- Don’t use too many slang words and be professional. Try to use more industry-specific words.
These were the briefs, and now let’s assume you got success with your elevator pitch. What’s next? Next is creating the pitch deck. Well, we have covered it in the next segment. Keep reading.
Considerations for your sales pitch deck for an investor and its importance
Time for you to showcase what your product has got. You have the investor’s initial interest through the elevator pitch, and you want to mesmerise them with your innovative mobile app startup idea. Here, detailed work is required to discuss your project thoroughly. What considerations may help you out to get the funding? Let’s discuss. First, let’s talk about preparing a pitch deck. Here are a few points that you must incorporate in your presentation deck.
A pitch deck must explain various questions around your mobile app startup idea. Questions related to your product, consumer consumption, your competitors, etc.
KPIs and benefits:
It is essential to discuss the KPIs (Key Performance Indicators) related to your business idea. It must include what profit you and your investor can bear from these KPIs.
Adding quotes or fancy images won’t necessarily work, but visuals in terms of statistics would make a big difference. It would build confidence in your investor that you have done your product and market research in every way possible.
You must let your investor know that you got complete expertise and experienced professionals to work on your mobile app startup. If they know your strong team, it would add to your credibility.
Time to learn about the various ways in which you can fund your mobile app startup. It is crucial to have a thorough understanding of this topic. Additionally, it would help you choose which funding method is the right one for your mobile app startup.
Different Ways of Funding Your Mobile App Startup
One of the easiest ways to get started with your mobile app development services, this kind of funding involves none other than you. You can put in your existing investment, savings, salary, or personal funds. It gives you wings to get started without sharing the ownership with outside mobile app investors. You have all the controls in your hand and can create your process in the ideation stage itself.
Family, Friends and Personal Networks
In this case, if you have relatives or friends, they can also help you get started. They might get interested and help you financially to do market research, create a basic prototype and at least begin on your dream project. But, yes, to speak financially, for prolonged finances, you need to look for real investors that we are discussing below.
It is yet another approach to get some finances and hit the ground. You can ask someone trustworthy and reliable enough to be your co-founder. They can invest, and you can share the profit margin on a mutually agreed basis. It could even be your relative or even an unknown person with some credible authority in society.
It is a great way to build your idea practically and analyse your competitors. Many app contests happen to dig out startup ideas. The judges of these contests are primarily investors who can help you know where you stand in the market, what needs to be corrected or what is your app’s best feature can help you sustain. By entering into such competitions, you would gain a lot of valuable references that can help you get finances for your mobile app company.
As a tech-based funding option via the internet, it is a collaborative way to raise your funds. Some known names in the market are Fundable and CircleUp. This type of funding has more subsets to it. There are three more categories of crowdfunding that you will find in the market.
- Donation-based: You can run online campaigns and ask for financial help from people through the sites like GoFundMe. The contributors know there will be no reward they will get in return, but it is a mere donation that they are raising for an idea that they might think can solve some problem.
- Reward-based: Check out sites like Indiegogo and Kickstarter to get you started with reward-based crowdfunding. You have to give some reward (in return) if an individual lends you some money. This crowdfunding form is also an online campaign, and you need to exchange something in return.
- Investment funding: This type of crowdfunding is also known as ‘Equity’ funding. Entrepreneurs raise funds through the sale of securities which includes but is not limited to a share, revenue share, or a debt. The startup owner has overall control over their selling and offerings.
If you have much clarity and belief with your mobile app development services, it’s time to opt for a large sum of money. An authoritative figure in society, an established investor, or a wealthy personality – these are pro investors who can help you with your finances. An angel investor is primarily an individual who can help you raise a solid amount of funding if they believe in your dream project.
So, create a compelling argument for your mobile app investors. Your well-prepared pitch should argue why you are the right mobile app development company and why the investor should gamble on you, not your competitors.
You must have heard of this a lot of times. They are mostly well-known and big companies that invest in startup ideas. They have the right budget, which you might be seeking for your dream project. And for your team building. But yes, unlike angel investors, you need to be receptive to tweaking and moulding your original idea with their feedback.
Professional Social Networks
Social media is an excellent opportunity to get some mobile app investors. Platforms such as LinkedIn or Meetup offer a great way to create a robust social network of professionals. You can announce your mobile app investor requirement on more social platforms such as Plaxo, Xing, Cofoundr, and EFactor.
Here, on these platforms, stay consistent and proactive. This might bring you great social support – and maybe even the mobile app investor you need.
Stages of Investment and Funding Rounds
Pre-Seed FundingThis stage is the preliminary stage. The first stage is where your mobile app development company is in its ideation stage. It has not materialised yet. It involves asking for funding from your friends or family. You can also become your first mobile app investor. It is the beginning of your investment chapter for your business.
Angel or Seed Funding
This second investment round involves venture capitalists (early-stage), angel investors, and startup incubators. This is that stage where your product is taking some speed after a base prototype. You need to polish your product and do more market-fit research. You are still not operational and need to develop your product. To do all that, seed funding is required. So, it is that round where you kickstart your progress on your mobile app development services.
Series A Funding
To reach this round of Series A funding, you must see success in the seed funding stage. Your product is already making some noise in the market. Your mobile app idea is validated with a clear proof of concept. A central goal of your brand is thoroughly defined with concise optimal growth. Typically, this stage is funded by super angels, venture capitals, and family offices.
Series B, C Funding
Entering this Series B and C means you have created tremendous success in the market. You are ready and all set to expand your team. It is time to invest the Series B funding to further the growth and development of your product to global space.
Also, you have an established business at this stage. It will certainly demand more advertising budget to skyrocket its expansion. With this, you also have a brand reputation that needs to be maintained and needs monetary support. The investors mainly venture capitalists and corporate investors. The company will look for strategic repositioning, acquiring other potential companies, and further goals for new market endeavours.
IPO (Official Public Offering)
This stage means offering the private company shares to the public in a stock issuance format. Recently, Zomato has announced its IPO and is making booming scores in the Indian market with its IPO.
Developing a complete app from its ideation stage to its release stage is daunting. The product development will see optimisation stages. Feedback from investors might re-iterate the whole development process. The infusions from various stakeholders will make bundle changes to your mobile app development.
It is easier to make all changes if you get funded. So, always remain receptive to the needs of your investors, market, and consumers. As you get through various funding stages, you will certainly understand that getting funded is not tough if your product is envisioned correctly in its inception stage.
Stay innovative and creative with your pitch deck and learn from every investor you meet. They will certainly give you at least one piece of advice to help you get more funding.