You have an excellent idea for an Android app for your startup. But how do you raise funds to finance the project? Here are some tips that may help.
#1 – Cover Your Bases
Most entrepreneurs begin their startups with personal investments. Your personal savings should be enough to help you start your project. A personal investment will also prove to other investors that you’re committed to the endeavour.
In addition to personal savings, you need to cover your bases to gain the confidence of financial backers:
- Complete market research.
- Develop a business plan.
- Study your competitors.
- Ask yourself what need your app is fulfilling.
- Set a reasonable development timeline.
- Understand the costs of development.
- Set clear goals.
- Set monetization strategies.
#2 – Family and Friends
With your research complete and personal investment ready, you can approach friends and family to ask for funding.
Treat any funding from people you know with professionalism. They should be aware of all risks and rewards and sign a contract. Early backers usually accept equity in a startup for a chance at a greater reward later.
If you have enough funds, partner with the best local Toronto or Montreal developers like Guarana Technologies to create your prototype and then your minimum viable product (MVP). Your MVP will have enough features and value to appease early customers and entice financial backers to invest money.
An MVP isn’t a complete product. But it has the necessary features to gain validated learnings from customers.
#3 – Crowdfunding
Many startups rely on crowdfunding when personal savings and financing from family and friends aren’t enough to develop an MVP. Crowdfunding platforms like Kickstarter can help you realize your initial funding goals for your Android app.
#4 – Banks
Most startups turn to conventional lenders like banks for their first loans. While banks can be reliable partners, they’re also risk averse. They may ask you to satisfy many metrics to qualify for a loan — you must have a good credit report, an excellent business plan, and much more.
#5 – Government Incentives
Many governments offer financing to startups at different stages of development. Look up what subsidies and grants your government offers for your app idea.
#6 – Accelerators
Accelerators, also known as incubators, can support your young android startup with all types of resources, including funding. Additionally, they can offer technology, media, laboratories, and other forms of support.
#7 – Angel Investors
They call them angel investors because they’re like angels to a startup in need of cash. Angel investors are wealthy individuals who look for startups with potential. They may offer anywhere from $50,000 to a million. The good news is that unlike banks and venture capitalists, angel investors often invest instinctively and in young startups.
In return for the investment, an angel investor may want more control than your startup is willing to give. So, discuss all terms and conditions carefully.
#8 – Venture Capitalist
Venture capitalists are companies that specialize in investing large sums of money in startups with great potential. They will offer millions of dollars but demand 25 to 50% of your company’s ownership.
As a startup, you have many options for fundraising. To make the investment worthwhile, work with the right team of app developers after thoroughly completing your market research and business plan.