How Can I Show Investors My App Will Actually Make Money?

A well-known automotive manufacturer spent six months developing a maintenance tracking app that let drivers monitor service schedules, book appointments, and receive alerts about potential issues. They built a slick interface, integrated with their dealer network, and even added AR features for checking fluid levels. When they pitched to their board for expansion funding, the first question was brutal: "How does this make us any money?" They had no answer. The app got shelved three months after launch because nobody had bothered to work out a monetisation model that actually made sense for their business.

I've sat through more investor meetings than I care to count, and I can tell you this much—the money question comes up every single time. Not "will users like it?" or "is the technology sound?" but "how will this actually generate revenue?" Its the question that separates serious app projects from expensive hobbies, and honestly, most founders aren't prepared for it. They've spent months thinking about features and design, but when someone asks them to explain their path to profitability, they freeze up or start throwing out vague statements about "ad revenue" or "maybe a subscription model."

The difference between an app idea and an app business is a clear answer to how money flows from users to your bank account.

The thing is, investors have seen thousands of pitches. They know when you're making numbers up or copying someone else's business model without understanding why it works. What they want—what they need—is evidence that you've actually thought through how your app will make money, who will pay for it, and why your projections aren't just wishful thinking. That's what this guide is about; showing you how to build a financial case that stands up to scrutiny and actually reflects the reality of the mobile app market.

Why Most Revenue Projections Get Laughed Out of the Room

I've sat through more investor pitches than I care to count and I can tell you the moment when most of them fall apart. Its when the founder flips to their revenue projections slide. You know the one—hockey stick growth, millions in year three, and numbers that seem to have been plucked from thin air. The investors start checking their phones. Game over.

The problem isn't that founders are being dishonest, its that they fundamentally misunderstand how mobile app revenue actually works. I've seen healthcare apps project 100,000 paying subscribers in year one when the entire addressable market in their region is maybe 250,000 people. I've watched e-commerce apps assume 15% conversion rates when the industry average sits around 1-2%. These aren't just optimistic projections—they show a complete disconnect from reality, and investors spot it immediately.

Here's what actually kills your credibility: projections that ignore user acquisition costs entirely, assuming exponential growth without explaining the mechanics of how you'll achieve it, and revenue models that don't match user behaviour patterns. When I built a fintech app for a client, we projected conservative numbers based on actual CAC data from similar apps in our space—we showed we needed £45 to acquire each user and demonstrated exactly how we'd recoup that through our subscription model over 18 months. That got funded. The competitor who projected 500% year-on-year growth with no justification? They got laughed out.

The Numbers That Actually Matter

Investors want to see these specific metrics backed by real data, not fantasy:

• Customer acquisition cost based on actual market testing or competitor analysis
• Realistic conversion rates that match industry benchmarks for your category
• User lifetime value calculated from actual retention data or comparable apps
• Time to profitability that accounts for the 6-12 month ramp-up period most apps experience
• Churn rate assumptions that reflect the brutal reality of app retention (most apps lose 90% of users in the first month)

The projections that get taken seriously are the ones that show you've done your homework. Sure, you need to demonstrate growth potential, but not at the expense of credibility. I mean, would you invest in someone who clearly hasn't researched their own market?

Understanding Different Monetisation Models and Which One Actually Fits Your App

Right, lets get one thing straight—choosing the wrong monetisation model is one of the fastest ways to kill an app before it even gets going. I've seen it happen more times than I'd like to admit. A client comes in with this brilliant idea for a productivity app and wants to charge £9.99 upfront... when their entire target market is used to freemium models. Or they'll build a meditation app and think banner ads are fine, completely destroying the calm experience they spent months perfecting.

The truth is, there are really only a handful of monetisation models that work for mobile apps, and each one comes with its own set of trade-offs. In-app purchases work brilliantly for gaming and content apps—I've worked on a fitness app where we saw 3-5% of free users converting to premium features, which is actually pretty decent when you're talking about thousands of daily active users. But here's the thing; it requires a massive user base to make real money because your conversion rates will typically sit between 2-7% if you're doing well.

Subscription models have become the gold standard for SaaS-style apps and anything offering ongoing value. One fintech app we built moved from a one-time payment to a £4.99 monthly subscription and their lifetime value per user jumped from £15 to over £180 within the first year. But (and this is a big but) you need to justify that recurring cost every single month or users will cancel faster than you can say churn rate.

Freemium vs Premium: The Eternal Debate

Look, I'll be honest with you—premium apps (where users pay upfront) are basically dead unless you're in a very specific niche or you've got massive brand recognition. The data doesn't lie; freemium apps account for about 98% of app revenue on the App Store. When we launch apps now, we almost always recommend a free download with monetisation built in through subscriptions or in-app purchases.

Ad-supported models can work, but they're tricky. A news app we developed generates decent revenue through ads because users spend 15-20 minutes per session and come back multiple times daily. The CPMs (cost per thousand impressions) ranged from £2-8 depending on the user's location and the advertiser. But you need serious scale—we're talking hundreds of thousands of active users—before ad revenue becomes meaningful enough to sustain a business.

Transaction Fees: The Hidden Goldmine

If your app facilitates transactions between users or processes payments, taking a percentage can be incredibly lucrative. We built a marketplace app that takes 15% commission on each transaction, and once they hit critical mass with about 5,000 active buyers, the numbers started looking really attractive to investors. The beauty of this model is that it scales naturally with usage... no need to convince users to upgrade or watch ads.

The mistake I see constantly is founders picking their monetisation model based on what they like as users rather than what actually fits their app's value proposition and user behaviour. A healthcare app we worked on initially wanted ads because the founders didn't want to "charge people for health information"—but their investors rightly pointed out that a small subscription fee would be more sustainable and actually position the app as more trustworthy than an ad-riddled alternative.

Match your monetisation model to user behaviour, not your personal preferences. If users spend 2 minutes in your app once a week, subscriptions probably wont work. If they're in there daily for 30 minutes, ads or subscriptions could both be viable. Look at successful apps in your category and see what they're doing—there's usually a good reason the market has settled on certain models.

When you're presenting to investors, you need to show you've actually thought through why your chosen model makes sense for your specific app and market. I've sat in pitch meetings where founders couldn't explain why they picked subscriptions over in-app purchases, and you could see the investors mentally checking out. They want to know you understand the trade-offs—like how subscriptions provide predictable recurring revenue but require constant value delivery, or how in-app purchases can generate spikes in revenue but are harder to forecast.

One more thing that catches people out: platform fees. Apple and Google take 15-30% of your revenue (15% for subscriptions after the first year or if you're under $1M in revenue). Payment processing for other transaction types will cost you 2-3%. These aren't small numbers when you're building your financial model, and investors will definitely ask about them.

Building Realistic Financial Forecasts That Don't Make You Look Daft

Right, let's talk about the spreadsheet that makes or breaks your investor pitch. I've seen more app founders torpedo perfectly good ideas with financial forecasts that look like they were dreamed up after watching too many success stories. The worst one I ever reviewed projected 10 million users in year one for a niche healthcare app targeting podiatrists in the UK—there aren't even 10 million podiatrists globally! And yet this keeps happening because people confuse optimism with reality.

Here's what actually works when building financial forecasts that investors will take seriously. Start with your user acquisition costs—and I mean real ones, not the ones you hope you'll achieve. For most apps I've worked on, we're looking at anywhere from £3 to £8 per install depending on the category and targeting. If you're building a fintech app, expect the higher end of that range or even more because financial services is one of the most competitive spaces. Then work backwards from there; if you've got £50,000 for marketing in your first year, that's maybe 6,000 to 15,000 installs maximum, not the 100,000 some founders put in their deck.

The retention curve is where most forecasts fall apart completely. I've built e-commerce apps where we were thrilled to see 40% retention after 30 days—that's actually pretty good in that sector. But founders will often project 70% or 80% retention because it makes their numbers look better. Don't do this. It's better to be conservative and show you understand the reality of user behaviour than to present fantasy numbers that any experienced investor will immediately spot.

Monthly Forecast Structure That Actually Makes Sense

Your financial model should cover at least 18 months (not the standard 3 or 5 years that nobody believes anyway) and include these specific line items. I've structured dozens of these for clients, and the ones that get taken seriously all follow this pattern. You need your user acquisition spend broken down by channel—not just "marketing budget" but specifically how much you're allocating to iOS vs Android, paid social vs content marketing, influencer partnerships vs app store optimisation. Each channel performs differently and investors know this.

Then map your revenue per user based on your actual monetisation model. If you're doing subscriptions, what's your trial-to-paid conversion rate going to be? I've worked on subscription apps where we achieved 18% conversion from free trial to paid—that was after months of optimisation. Most apps see 5-10% when they launch. Whatever number you use, be ready to defend it with comparable apps in your space or explain how your onboarding is designed differently to improve that metric.

The Numbers Investors Actually Check First

There are three ratios that savvy investors look at immediately to see if you know what you're doing. First is your LTV to CAC ratio—lifetime value of a customer divided by customer acquisition cost. If this isn't at least 3:1 by month 18 of your forecast, you've got a problem. I worked with a startup whose initial model showed 1.5:1 and they couldn't understand why investors kept passing. We rebuilt their entire retention strategy and pricing model to get it to 4:1 and suddenly the conversations changed.

Second is your burn rate and runway. How long can you survive on the funding you're asking for? If its less than 12 months, you're basically telling investors they'll need to fund you again before you've had time to prove anything. Most successful raises I've seen give the company 18-24 months of runway, which means your forecasts need to show you reaching meaningful milestones (not profitability necessarily, but clear progress) within that timeframe.

Third is your unit economics—does each additional user make you money or cost you money? This sounds obvious but you'd be surprised how many app financial models I've reviewed where the founders haven't actually calculated whether their business model works at the individual user level. If you're spending £5 to acquire a user and they're only generating £3 in lifetime revenue, no amount of scale is going to fix that fundamental problem.

One thing that really helps is building in different scenarios. Don't just show your base case—show what happens if user acquisition costs are 30% higher than you expect (they probably will be) or if retention is 20% lower (also likely, at least initially). I always build three versions: conservative, moderate, and optimistic. The conservative one should still show a path to sustainability even if everything takes longer and costs more than planned. If your conservative scenario looks terrible, you need to rethink your entire approach before talking to investors.

The big mistake I see constantly is people treating their financial forecast like a piece of creative writing rather than a mathematical model based on real assumptions. Every single number in your spreadsheet should have a source or a logical explanation. When I'm building these for clients, I literally add a notes column explaining where each assumption comes from—"based on App Annie data for fitness apps in UK market" or "conservative estimate based on our beta test results with 200 users". This level of detail shows you've actually thought it through rather than just making numbers up that lead to the valuation you want.

Another thing—don't forget to include the costs everyone conveniently leaves out. Your app will need ongoing maintenance, bug fixes, feature updates, customer support, server costs that scale with users, payment processing fees, and probably a dozen other things you haven't thought of yet. I worked on a delivery app where the founders completely forgot to budget for customer service—they assumed their app would be so intuitive nobody would need help. Within two weeks of launch they were drowning in support requests and had to scramble to hire people, completely blowing up their financial model for the first six months.

The investors I work with regularly tell me they'd rather see conservative forecasts that prove the founder understands their market than wildly optimistic projections that show naivety. Your financial forecast isn't just about the numbers—its about demonstrating that you've thought through your business model, understand the economics of your industry, and have a realistic plan for getting from zero to sustainability. Get this wrong and it doesn't matter how good your app idea is; nobody's going to give you money to build it.

Proving Market Demand Before You've Built Anything

Here's the thing—investors aren't going to hand over money based on your gut feeling that people will love your app. They want evidence. Real, tangible proof that actual humans will download, use, and (most importantly) pay for what you're building. The good news? You can gather this proof without spending six months and £100,000 building a full app.

I've seen founders do this brilliantly with what I call "smoke tests." One client had an idea for a healthcare app that would connect private physiotherapists with patients for home visits. Before building anything, they created a simple landing page explaining the service, added a waitlist signup form, and ran targeted Facebook ads to people who'd recently searched for physiotherapy services. Cost them about £800 in ad spend. They got 340 email signups in three weeks—that's 340 people willing to share their contact details for a product that didn't even exist yet. When they showed investors that conversion rate (about 12% of landing page visitors), suddenly their revenue projections had actual data behind them.

The best validation comes from people willing to give you something of value before your app exists, whether that's their email address, their time in an interview, or ideally, actual money

Another approach that works really well is the "concierge MVP" where you manually provide the service your app would eventually automate. Sure, its not scalable—but that's not the point. A fintech startup I worked with spent two months helping 25 users manage their subscriptions manually through spreadsheets and weekly check-ins before building their subscription management app. They learned exactly what features mattered, what users would pay, and most importantly, they had 25 paying customers to show investors. That's the kind of market validation that changes conversations from "will this work?" to "how fast can you scale this?"

What Investors Actually Want to See in Your Numbers

After working with dozens of startups through funding rounds, I've sat through enough investor meetings to know what makes their eyes light up—and what makes them mentally check out. The thing is, investors don't actually expect you to predict the future with perfect accuracy. What they want to see is that you understand your business model at a fundamental level and can defend your assumptions when challenged.

The first metric they'll dig into is your CAC to LTV ratio (Customer Acquisition Cost versus Lifetime Value). I worked on a fitness app where the founders initially projected a £3 CAC and £50 LTV, which looked brilliant on paper. But when investors asked how they'd achieve that CAC given that similar apps were paying £8-12 for quality installs, the whole pitch fell apart. Your numbers need to reflect actual market conditions, not wishful thinking. A healthy ratio is typically 3:1 or better—meaning each user generates at least three times what you spent to acquire them.

Second thing? Cohort retention data. Even if you haven't launched yet, investors want to see that you've thought through what percentage of users will stick around after day 1, day 7, day 30. For a healthcare app we built, we showed comparable retention rates from similar apps in the space and explained why ours might perform 10-15% better due to specific design choices. That's believable. Claiming you'll have 80% retention when industry average is 25%? That's a red flag.

Your burn rate and runway matter more than most founders realise. Investors want to know how long their money will last and what milestones you'll hit before you need more funding. I've seen promising apps fail to secure second rounds simply because they couldn't articulate a clear path to profitability or next funding trigger. Show them you can stretch every pound and that you're thinking strategically about when to spend versus when to bootstrap.

Monthly recurring revenue (MRR) is king for subscription apps. Even small numbers are fine if the growth rate is consistent. A fintech app we developed went into investor meetings with just £2,400 MRR but showed 15% month-over-month growth for six consecutive months. That trajectory told a story that excited investors far more than theoretical projections ever could. If you're pre-revenue, you need something else compelling—waiting list signups, letter of intent from potential corporate clients, or beta user engagement metrics that suggest strong product-market fit.

Unit economics need to make sense at scale. This is where a lot of pitches fall apart, honestly. Your costs can't just stay flat as you grow—server costs increase, customer support needs expand, payment processing fees add up. I worked on an e-commerce app where we had to show investors how our gross margin would actually improve at scale due to better supplier terms, but we were honest about increased infrastructure costs. They appreciated the nuanced thinking rather than a simple "everything gets cheaper as we grow" assumption.

Creating a User Acquisition Strategy That Makes Financial Sense

The truth about user acquisition is that its probably the biggest expense you haven't properly budgeted for. I've seen so many brilliant apps fail not because they were rubbish, but because the founders spent £80,000 building the thing and had £5,000 left for marketing. That's backwards, honestly. For every pound you spend on development, you should be planning to spend at least another pound—often more—on getting users through the door.

Your user acquisition cost (UAC) needs to make sense against your lifetime value (LTV). The basic rule I follow is that your LTV should be at least 3x your UAC. So if it costs you £15 to acquire a user through Facebook ads, that user needs to generate at least £45 in revenue over their lifetime with your app. Sounds simple, but you'd be surprised how many pitch decks I've reviewed where the maths just doesn't work. For a healthcare app I helped launch, we calculated a UAC of £22 through targeted Instagram campaigns, but the average user only generated £18 in subscription revenue before churning. That's a losing proposition no matter how you slice it.

Breaking Down Your Acquisition Channels

You can't just say "we'll use social media and it'll go viral"—investors have heard that a thousand times and it makes you look naive. You need specific channels with realistic costs. Here's what I typically see working across different app categories:

• Paid social (Facebook, Instagram, TikTok): £8-25 per install depending on targeting
• Google App Campaigns: £5-18 per install, better for apps solving search intent
• Content marketing and SEO: Slow burn but can get costs down to £2-5 per user
• Referral programmes: £3-8 per user if you've got product-market fit
• App Store Optimisation: Essentially free but takes months to show results

What investors want to see is that you've tested multiple channels at small scale and you know what works. For a fintech app I worked on, we spent £2,000 testing five different acquisition channels before the official launch. Instagram ads performed terribly (£34 per install), but Google campaigns came in at £9 per install with much better quality users. That learning shaped the entire acquisition strategy and gave investors confidence we weren't just guessing.

The Cohort Analysis Investors Actually Care About

Here's something that separates amateur pitches from professional ones: cohort retention analysis. Its not enough to say you'll acquire 10,000 users in month one. Investors want to know how many of those users stick around, because that's what determines your actual revenue projection. I always build a simple cohort table showing retention at day 1, day 7, day 30, and day 90.

For e-commerce apps, if you're not retaining at least 40% of users past day 1, your acquisition strategy is basically just throwing money away. For a shopping app we developed, initial retention was only 31% on day 1, which meant our effective UAC was actually £19 (not the £12 we were paying) once you accounted for the users who installed and immediately bounced. We had to fix the onboarding experience before scaling acquisition made any financial sense at all.

Build your acquisition strategy around one primary channel that you've validated with real data, then show investors two secondary channels as backup. Having a plan B and C demonstrates you understand that marketing isn't guaranteed.

The biggest mistake I see? Founders who budget for acquisition but not for optimisation. Your first campaigns will be inefficient—that's guaranteed. You need budget set aside to test creative variations, audience segments, and messaging angles. Plan on spending 20-30% of your acquisition budget in the first three months just on learning what works before you scale up spending.

Common Mistakes That Kill Your Credibility With Investors

After sitting through hundreds of pitch meetings over the years, I can tell you that most founders torpedo their own chances before they even get to the interesting bits. Its not usually the app idea that fails—it's the way they present the numbers and their complete misunderstanding of what investors are actually looking for. I've seen brilliant healthcare apps with genuine patient benefits get rejected because the founder couldn't explain their churn assumptions, and I've watched mediocre e-commerce apps secure funding because they demonstrated they understood their unit economics inside out.

The biggest mistake? Pulling growth numbers out of thin air. You know what investors hate most? When you say "if we capture just 1% of a billion-pound market" without explaining how you'll actually capture that 1%. I worked with a fintech startup that projected 100,000 users in year one with a £50,000 marketing budget—that's 50p per user acquisition in a space where the real cost is closer to £15-25. The investors saw straight through it. Another founder told me they'd assumed a 2% conversion rate because "that's industry standard" but couldn't explain why their onboarding flow would achieve that when they hadn't even designed it yet.

The Credibility Killers I See Most Often

Here's what actually gets your pitch binned before you've finished talking. Not understanding your burn rate is deadly—I've seen founders with 18 months of runway claim they're "well funded" when they haven't factored in their user acquisition costs ramping up. Ignoring platform fees is another classic; one education app founder projected £500k revenue but forgot that Apple and Google take 30% off the top, and their payment processor takes another 2.9%.

• Claiming you have "no competition" when there are clearly similar apps in the store already
• Showing hockey stick growth charts with no explanation of what drives that inflection point
• Presenting user numbers without any retention metrics or cohort analysis
• Forgetting to budget for the ongoing costs like server infrastructure, which scales with users
• Assuming every user will behave the same way in your revenue model
• Not having a plan B if your primary monetisation strategy doesn't work
• Mixing up vanity metrics like downloads with actual revenue-generating active users

Why These Mistakes Matter More Than You Think

The thing is, investors aren't just looking at your numbers—they're looking at how you think. When you present unrealistic projections, you're basically telling them you don't understand your own business model. I had a client pitch an app with premium subscriptions but they'd based their entire forecast on freemium conversion rates from a completely different industry. The investors didn't just reject the numbers; they questioned whether the founder had the judgement to run a company.

What really damages credibility is not acknowledging risks and assumptions. Every financial model has weak points; pretending yours doesn't makes you look naive rather than confident. A retail app founder I worked with actually won over investors by saying "our biggest risk is that Instagram launches this feature before we get traction, so here's our plan if that happens." That honesty built more trust than any perfect spreadsheet ever could. Investors have seen thousands of pitches—they can smell bullshit from across the table, and they definitely know when you're oversimplifying because you haven't done the work.

Conclusion: Turning Your App Idea Into a Fundable Business

Look, I've watched hundreds of founders walk into pitch meetings over the years and honestly? The ones who succeed aren't always the ones with the flashiest ideas. They're the ones who've done their homework. They know their numbers inside and out, they understand exactly where revenue will come from, and they can explain it all without sounding like they're making stuff up on the spot. That's what separates fundable businesses from pipe dreams.

The thing about building a credible investment pitch is that its not really about perfection—its about showing you understand the reality of your market. I've seen fintech apps with modest projections get funded over healthcare apps with wild growth curves, simply because the fintech founders could justify every assumption. They'd talked to actual users, they knew their CAC down to the penny, and they could explain exactly why their freemium model would convert at 4% instead of 2%. That level of detail matters more than promising investors the moon.

What I've learned from working with startups that went on to secure funding is this: investors aren't looking for guarantees because they know those don't exist. They're looking for evidence that you've thought through the hard questions. Why will users pay for this? How much will it cost to acquire them? What happens if your conversion rate is half what you projected? If you can answer those questions without flinching, you're already ahead of most founders.

So take everything we've covered—your monetisation strategy, your financial forecasts, your proof of market demand—and weave it into a narrative that shows you're not just building an app. You're building a business that can generate real revenue from real users. That's what gets funded.