Expert Guide Series

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

  
Welcome

Introduction

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.

  
The First Circle of Trust

Friends and Family

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!

  
Finding Your Business Guardian Angels

Angel Investors

get-app-funding-angel-investor

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.

  
Big Money with Big Expectations

Venture Capital

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.

    
Rallying the Masses for Your App

Crowdfunding

get-app-funding-crowdfunding

Crowdfunding is essentially rallying the internet to fund your idea. It’s a bit like shaking the digital collection tin, but with more pizzazz. The concept is simple: you showcase your app idea on a crowdfunding platform, and people who are interested in it can contribute money to help you bring it to life. 

Platforms like Kickstarter, Indiegogo, and GoFundMe have transformed how we think about funding. The great thing is, it doesn't just give you a chance to gather funds; it also validates your idea. Imagine hundreds of people believing in your app enough to chip in! 

But here’s a nugget of wisdom: the most successful campaigns are those with a pre-existing fan base or network. It’s like a band on stage – much better with a crowd already hyped and ready to cheer you on. Your marketing skills will certainly be put to the test. Think promo videos, engaging content, and regular updates. Plus, enticing rewards for backers can be a game-changer. Everyone loves a good deal, right? 

One word of caution though – this isn’t free money. Most platforms take a percentage of what you raise, so factor that into your plans. And be prepared to deliver what you promise; your backers will be eagerly waiting for updates and, ultimately, the final product. 

So, is crowdfunding the right route for you? It's brilliant for those with a knack for marketing and a compelling app idea. If you love engaging people and have the grit to keep them invested (pun intended), go for it.

    
Tapping into Public Funds

Government Grants

Government grants can be a goldmine for those looking to fund a mobile app, especially if your app serves a broader social good or aims to solve community issues. Now, before you roll your eyes at the word "government," remember that not all grants are shrouded in red tape. In fact, there are plenty designed just for tech innovations, including mobile applications. 

Take, for instance, Innovate UK – they’ve got a whole range of programmes aimed at supporting cutting-edge technology. These grants can provide substantial non-dilutive funding, meaning you get the cash without giving away any equity. That's a win-win if you ask us!!

An essential tip here is to make sure your application stands out. Government grants can be competitive, so you'll need to clearly articulate how your app addresses a real need or brings innovation to the table. Bring your best game – think of it as Dragon's Den but without the dragons breathing down your neck. 

Finally, stay aware of the small print. Compliance and reporting can sometimes feel like learning a new language but meeting those requirements is crucial. And hey, if it helps you get that much-needed funding, it’s worth the effort. At Glance, we’ve seen clients succeed with government grants and trust us, the process gets less daunting with practice.

      
Aligning with Established Players

Corporate Partnerships

different-types-funding-app-development-corporate-partnership

Who says you have to go it alone? The right corporate partnership can not only fund your mobile app but also add immense value through strategic guidance, resources, and credibility. Companies big and small offer what's termed as "strategic investments" that could greatly benefit your business. 

Think about it: a tech giant or an industry leader invests in your app, lending you their brand clout. It’s like getting a championship football coach to help you train. They know the game inside out and their endorsement can open doors you didn't even know existed. For example, linking up with a major telecommunications company might get you network access and user insights you couldn't dream of on your own. 

However, it's not just about the cash. With corporate partnerships, you're often getting seasoned mentors who can steer you through the pitfalls, provide invaluable feedback, and sometimes even help with marketing. It’s like getting a bundled deal—funding, mentoring, and promotional support all in one. But remember, this might require giving away a slice of your company, and sometimes, playing ball with corporate giants means meeting certain tough requirements. 

So, how do you find your ideal corporate partner? Start by researching companies that would naturally benefit from your app's success. Whether that’s a retail giant needing a new customer engagement tool, or a healthcare provider looking to improve patient services, the key is to find a mutually beneficial partnership. Scour industry events, business networks, and online platforms to make these crucial connections. 

And don’t forget: these companies have their own goals. They want a return on investment and strategic advantages so make sure your pitch clearly demonstrates how your app aligns with their objectives. Foresight and a clear strategic fit will make your proposal much more enticing, plus, your willingness to adapt to their needs can be a significant differentiator in a sea of hopeful startups.

                
Summing Up

Conclusion

We've walked you through several ways to fund your mobile app, from leaning on the kindness of friends and family to diving into the big leagues with venture capital. Each avenue has its own flavour, risks, and rewards, and the best choice depends on your specific situation, goals, and perhaps a touch of luck. 

Finding the right funding for your app can feel a bit like navigating through a maze, but remember, you're not alone in this. We're here at Glance to help guide you through the journey. After all, every successful app out there started with someone just like you—someone with a vision, passion, and a plan. 

Ultimately, it's about weighing your options, preparing a solid pitch, and choosing the path that feels right for you. Don’t be afraid to think outside the box, and remember, even if one door closes, another might just open. Good luck, and happy app-building! 

If you have any questions or need further guidance, reach out to us at Glance, we're always here to help turn your app dreams into reality.

Related Articles

From Our Blog

Stay up to date with what is new in our industry, learn more about the upcoming products and events.

The Return to Simplicity: Why Less is Trending More

The Return to Simplicity: Why Less is Trending More

Dec 3, 2024 10 min read
Harnessing AI's Genuine Utility in Mobile Apps

Harnessing AI's Genuine Utility in Mobile Apps

Dec 3, 2024 10 min read
Digital Wellbeing: Building Apps That Enhance Lives, Not Consume Them

Digital Wellbeing: Building Apps That Enhance Lives, Not Consume Them

Nov 25, 2024 6 min read
chatsimple