What Are the Different Types of Funding Available for a Mobile App?

Creating a mobile app can feel like standing on the edge of a high dive, ready to leap but unsure about how deep the water is. It’s thrilling, exciting and, let’s face it, a bit nerve-wracking! You know your app idea has potential, but the million-pound question is: how will you fund it? Don't worry, you're not alone in this, plenty of businesses have been in your shoes and found ways to make it work. 

Funding isn't about always having a big pot of gold. It's about being creative, resourceful, and open to different possibilities.

In this guide, we will explore several funding options for your mobile app, each with its own set of pros and cons so that you can walk away with a better understanding of: 

• Bootstrapping
• Seeking help from friends and family
• Angel investors
• Venture capital
• Crowdfunding
• Government grants
• Corporate partnerships

So, buckle up as we dive into the world of app funding, and let’s find out how you can turn your innovative idea into a reality without losing sleep over it.

Your inner circle can be a fantastic resource when you’re just starting out. These are the people who believe in you and your vision—mum, dad, best mate, even that enthusiastic uncle who always has something to say at family gatherings. These are the folks who might be willing to chip in, not just because they want to invest in an app, but because they want to invest in you. 

One of the perks of seeking funding from friends and family is that it often comes with less formalities and lower expectations. Of course, you'll want to treat it seriously—draw up a simple contract, set clear terms, and make sure everyone understands the risks and rewards. That way, you protect both your relationships and your business aspirations. 

Now, a fair bit of caution: mixing business with close relationships can be tricky. If things go wrong, it may strain your personal connections. But with transparent communication and a bit of planning, you can handle these relationships professionally. Just keep in mind that your Aunt Sally’s Christmas pudding will still be on the table, regardless of your app's success. 

Leveraging the trust and support of those closest to you can give your app the initial boost it needs to get off the ground. And who knows? Maybe your app will revolutionise the way your family checks in for Sunday roasts!

Think of angel investors as your app's fairy godparents. They've got the money, they believe in your dream, and they're ready to help you make it a reality. With their own experiences in the world of business, angel investors not only provide funding but also mentorship, networking opportunities, and strategic advice. For many of you, this can mean the difference between a brilliant idea sitting in a notebook and a thriving app in the App Store. 

However, like all good things, this arrangement comes with its own set of challenges. Angels are usually seasoned entrepreneurs themselves and will expect a return on their investment. This often translates to giving up a slice of your company's equity. It's a bit like offering them a piece of your delicious pie – you get to share your success, but you also share the profits. 

Now, let’s talk about finding these elusive angels. Networking is your best friend here. Attend industry events, join entrepreneur groups, and connect with people on LinkedIn. Online platforms like AngelList can also be a goldmine for finding the right investors. Just remember, pitching to an angel investor is not a one-size-fits-all deal. Tailor your pitch to showcase the value, scalability, and unique selling proposition of your app. 

In summary, while angel investors can be game-changers by providing not just financial backing but also priceless industry insights, it's crucial to weigh the pros and cons. Give away too much equity, and you might find yourself with less control over your own venture. But, if done right, you’ll have a partner who’s as committed to your app's success as you are.

Venturing into the world of venture capital (VC) is like dating someone out of your league—you'll need to bring your absolute A-game. VCs offer not just a financial lifeline but also mentorship, networks, and other resources. However, this high-value package comes with strings attached, usually in the form of equity and some say in your business operations. 

The pros? Well, the cheque size can be quite substantial, often running into millions. This kind of injection can catapult your app from a promising idea to a market leader. With the backing of seasoned investors, you'll also gain credibility and open doors to new opportunities.

But here's the rub. VCs are like hawks; they expect significant returns on their investment, and they're not afraid to push for results. This means you'll need to meet high-performance benchmarks and be prepared for some intense scrutiny. If you're the sort of person who thrives under pressure and enjoys the thrill of competition, this could be an exhilarating ride for you. 

Remember, venture capitalists are not just your financial backers—they are your partners. This means they will have a say in major decisions, which could occasionally lead to clashes. It's a bit like having a co-pilot on your aircraft who insists on double-checking your every move. If that sounds more reassuring than annoying, you're likely the perfect candidate for VC funding. 

In the end, going down the VC route is all about weighing the risks against the rewards. It's about the potential for massive growth paired with the reality of sharing control. And if you're ready to navigate these waters, the payoff can be extraordinary. 

At Glance, we’ve seen many businesses grow to new heights with the help of venture capital and whilst it’s not for everyone, it can be the perfect fit for those ready to take bold steps to achieve their app dreams.