You have a successful mobile app idea and mobile app business plan.
Need funding for your early-stage startups?
But do not know how to proceed ahead?
Well, you need to attract app investors for your idea. Infact, according to Statista, with 3,553,050 apps on Google Play and 1,642,759 apps on App Store, you would surely want to develop an app that stands out.
Here is a screenshot that portrays a number of apps on app stores.
To make an app stand out from the competitors, you need money or investment. So if you have an idea that you believe is worth investing in, you should pitch it to a potential investor. But how to pitch an app idea that helps you get funding?
Being in the IT industry since 2010 and one of the leading mobile application development services providers in the USA, we understand what it takes to pitch an idea. Let’s understand the 6 steps to pitch your app idea. Have a look.
Table of Contents
- How to Pitch an App Idea to Investors [6-Step Process]
- Frequently Asked Questions About Pitching an App Idea
- Ready to Pitch Your App Idea?
How to Pitch an App Idea to Investors [6-Step Process]
In this section, we are going to discuss the 6 steps to pitch an app idea to investors successfully. To pitch your mobile app idea, start with finding the right app investors who can invest money in your idea.
Find the Right Investors for Your Mobile App
Your journey for pitching an app idea begins with finding investors in your industry who might be interested in investing money in your idea at the early stage. Here are a few ways that you can use to get through them.
- Start this phase by using your industry contacts, as you will find there is someone who is a part of the investor network. Therefore, use your professional network to go ahead in finding the right investors. Also, some of the referrals and endorsements from the network will lead you to get contacts of the investors. So, keep on meeting and discussing with all your industry contacts.
- Another great way to pitch investors is to use crowdfunding platforms where you can easily find investors to pitch your app idea. Several crowdfunding platforms are currently used by the investors, such as Kickstarter and GoFundMe. Also, you can leverage equity crowdfunding to consider your options for finding investors.
- You can approach angel investor networks that are there in your relevant industries. Find out in the local communities that keep investing in mobile app development ideas and finalize your list.
- Use other online platforms like LinkedIn and AngelList to get in touch with potential investors.
- Be a part of some startup and accelerator programs to find an investor.
These are a few ways that you can use to find an investor for your app idea.
- Most of the app investors are concerned with how much money they are going to make, risk involved, short-term profits, and not long-term quality. So, ensure that you know about the investors before selecting one; otherwise you may end up in the unhappy relationships.
- Research about the investor who is interested in your niche. If you’re B2B, make sure to contact investors who invest in B2B companies.
2 Helpful Tips to Find the App Investors
If you follow the above list and tips, you will get the right investor for your mobile app. In fact, one of our developed apps Glovo raised a total of $1.2B in funding over 12 rounds and was funded by 35 investors. Their latest funding was raised from a Series F round. Check out the below screenshot from Crunchbase to know the funding and investors of Glovo.
Now moving forward, you need to define how your app will be helpful for the target audience before you start to pitch to the investors.
Define How Your App Solves the Problem
Before you go in front of the investors, you need to be ready with your app’s USP along with how your app will solve the problems of the target audience. For this, invest some of your time defining the benefits of your app.
Here is how you can do it.
Identify your Target Market
Only if you are able to find a solution when you closely know what your audience is and what problems they are facing. This is an important step that you need to take to understand what all sorts of solutions you can bring with your app.
- Marital Status
To identify the target audience, here are the demographics that you can use:
Helpful Tip to Identify Target Audience
Run ads directly with the pain points of your product or service. Observe the search query reports and the audience type attracted to your ads. You will notice certain type of people and patterns. Make a list of that category and then focus on that target audience.
You need to find complete information on identifying the target audience, such as how young your audience is and whether they use Android phones or iOS phones. Identifying specific answers will only lead you to find the challenges of your users, and then you can define the benefits of your app.
Know Your Target Audience
If you have figured out who will your target audience, go out and ask them questions to learn more about their challenges. You can conduct a poll, ask your friends and families, or even can use social media platforms. Check their concerns and look for the problems currently existing in your app’s niche.
- How bad are these problems?
- How often do they occur?
- What’s causing them?
- How are they affecting people?
- Has anyone else tried solving these problems?
Analyze the Problem of Your Potential Users?
Ask these questions to yourself to analyze the current problem and find whether it is the right app idea to invest in.
This way, you will be able to see how your app can be helpful to users by brainstorming where your app fits.
What Problem Will You Solve?
If you are planning to develop an app, then you need to focus on only solving one or two big problems. Adding a lot of features in order to solve a lot of challenges in the initial stage could lead you to end up doing nothing. So brainstorm and identify which particular problem you want to solve with your app.
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Gather Data About the Market
To successfully pitch an app idea, you need to have a deep understanding of the latest market trends, market size, and customer requirements. This will help you know whether the product has a market or not. Also, investors will ask you for proof of how your app will attract users, so be ready with the data.
- How big the current market is for your niche
- Check for the growth in the recent years for the market
- How many potential users will you be able to reach with the marketing campaigns
- The estimated projected revenue
- How much are you looking to spend on acquiring a new user
- The estimated number of potential users who will use your app
Here is the information you will need to look for.
Must Know Tip to Gather Customer Data
Get the openly available Google spreadsheet for the data you want to gather. Just follow the below syntax in your google search:
site:docs.google.com/spreadsheets intitle:[anything you want]
Suppose you want data about the companies hiring remotely in 2023. You just need to use the syntax site:docs.google.com/spreadsheets companies hiring remotely 2023. You will get the open spreadsheet with the companies name.
Know the Competition for Your Business
To do this, you need to conduct a competitive analysis. This is all about finding the weaknesses and strengths of your existing and potential competitors. You have to conduct this analysis at every step of your mobile app development journey along when you are planning to pitch the app idea.
Here are a few things that you need to note down in order to see see how your competitors are doing in the same niche as yours.
- Understand what they are doing and offering to the users
- Know where your competitors are lacking and make that weakness your app’s strength
- Check how well they have designed the app and how easy it is to navigate the app
- Draft a plan to execute your mobile app idea with a USP
- Understand their business model and marketing strategies to attract customers
- Find out which revenue models they are using to generate revenue
Moreover, analyzing the competitors is all about finding where they are falling short in addressing the customers’ problems so that you can avoid the same pitfalls and convert it as an opportunity to build a unique mobile application.
Finalize the Monetization Strategy of Your App
It is not easy to impress investors and venture capitalists and make them believe in your idea if you are not ready with a revenue model. But, of course, as they will be investing in your idea, they would need some assurance of gaining profits through the app. And it is only possible when you are ready with your monetization strategy.
So how do you make money through a mobile app? Let’s understand this in this section.
Decide Between Free vs Paid Monetization Model
First, let’s talk about the paid monetization model, where you will charge your users to download the app. It is a simple and tempting process to make money. However, this will not be easy for anyone. According to a report by Statista, 93.9% of apps in the App Store are free, and 97% for Android apps.
Until and unless you don’t show or convince the potential users about the worth of downloading and purchasing your app, they will be skeptical about putting money into it. Indeed, it requires a loyal user base. Otherwise, users are more likely to download such apps which are free.
If you are thinking of keeping your app free for users, then let’s understand the other ways as well which will help you make money and best serve your app.
How Free Apps Make Money
There are various ways that you can implement to make money through your app. If you want to know how free apps make money, let’s start to understand each of the monetization models. So you know which model will perfectly suit your requirements.
Model Description Example Advertisements This monetization model is used by various entrepreneurs if they have chosen to keep their apps free. In this model, a third party pays you whenever a user clicks on their ads via your application. Moreover, you can also charge money from users for removing ads from their screen time. YouTube In-App Purchases In this model, a user makes the purchase within your app. It could be anything from points to coins and extra features. So, in order to use premium features, a user has to unlock them by making a payment. Tinder Subscriptions This is also a very popular model where you can choose to offer your app’s content in exchange for money. It could be a monthly or yearly subscription model based on your requirements. Netflix
Create a Pitch Deck to Attract Investors
So far, you are ready with all the essential information that you need to prepare a perfect pitch deck to get funding for your app. Just ensure your pitch deck matches the stage of funding you are looking for, such as seed funding, series A, and so on. So, let’s see how you can start with creating a pitch deck.
- Introduction: Start with a brief description of yourself and the idea that you are going to pitch. Then go ahead with your elevator pitch which should be short and concise.
- Team: If you have assembled a team, then also share a quick glance at your team and their backgrounds.
- Problem: Mention all the problems currently faced by your target users and how your idea will resolve challenges.
- Competition: Tell about your existing competitor and mention how your idea is unique and different from theirs.
- Product: Explain how your app will work and what sorts of challenges it will solve.
- Market: Share the market size and projected growth to ensure the angel investors show interest in your idea and project.
- Revenue Model: Add your monetization strategies and how you are planning to generate money through the app.
- Investing: How much funding do you expect? You should also say this at the end.
- Contact: Leave your contact information.
How to Create a Pitch Deck
To make a perfect pitch deck, you need to ensure to include the following points.
Bonus Tips: 6 Pointers to Create a Pitch Deck
Here are some of the tips that you can use to create a pitch deck for venture capital firms.
- Ensure to have one clear message
- The problem: What problem are your customers struggling with?
- The solution: How does your product or service solve that problem?
- Know the numbers and analysis to show that you have in-depth knowledge about the market.
- Instil the FOMO emotion and make them realise that they need to invest immediately-before someone else does.
- Be authentic when you show the benefits of using your app in front of a venture capitalist.
- Don’t pitch the product but instead the investment. They need to have an understanding of product market fit and the ROI.
- Be specific with the app features and how you are planning to execute your idea.
Do You Have a Great App Idea?
We have a team of talented mobile app developers who have experience building top solutions like Glovo, One8, Aesthetic Editor, and H2GO.
If you want to know more about pitching your app idea or protecting it, check the next section. We have addressed a few FAQs for you so you get a better understanding of this topic. Have a look at all the questions.
Frequently Asked Questions About Pitching an App Idea
Which are the type of app investor for your start-up?
Four common investor types for startups include:
- Banks: You can seek bank loans to help with startup costs. You may have to provide collateral, such as a home equity loan, and as much startup cash as possible.
- Angel investors: Angel investors are usually wealthy entrepreneurs who want to leverage their wealth by investing in projects they are passionate about, especially startups. Sometimes, they also mentor or advise the business in which they are investing.
- Venture capitalists: A venture capitalist is an investor that invests in a business only if the business has an idea or growth rate of becoming successful.
- Personal investors: A personal investor is an individual investor that invests their capital in a business company, or any investment opportunity for that matter, for their own personal gain.
What is seed funding?
Seed funding is a first round of capital raising process before moving to subsequent rounds of Series A, B, C. It happens usually anytime during its formation at the idea stage, having just a plan, prototype, or in a trial phase, with no or negligible customers.
What is Series A, Series B, and Series C round funding?
Series A: The first round after the seed stage is Series A funding. In Series A, plan for developing a business model in a way it provides long-term growth is necessary.
Series B: Series B funding becomes possible only when you prove your market viability and are ready to expand on growth paths that have shown initial success.
Series C: Companies at this stage of funding have already created a successful product, a consistent user base, and a history of growth. The funding round aids the startup to expand as fast as possible.
How to protect your app idea
Below are the ways that you can consider protecting your app ideas.
- Start with the copyright process that will protect your idea and its creation
- Sign an NDA for app development with the mobile app developers and the app development company
- Outsource your app idea to a reliable mobile app development company
- Reserve your app’s name and its logos if you are planning to launch the app on the Apple App Store
- Trademark the app’s name and logos
- Document everything so that it becomes for you in the future if someone claims the same idea
How to find out if an app idea is good
To know whether your mobile app idea is good enough to convert it into a reality or not, here are the steps that you can consider.
- Always focus on solving a problem through your mobile app
- Look whether you have enough audience for your app or not
- Do market research and know about the current trends and requirements
- Define the app and create user flows and journey maps to offer fast and easy navigational
- Set validation goals for the app
- Develop one USP (unique value proposition) for the app which stands it out from the competition
- If you have a question “I have an app idea now what?“, validate your mobile app idea.
Ready to Pitch Your App Idea?
Through this guide, you get to know almost everything which is required to ensure that the fundraising process goes smoothly for your mobile application. From finding the rights investors to preparing the pitch deck, the strategies we have discussed will help you to raise money for your mobile app idea.
Using the discussed steps will help you reach out to many big players in the app industry who keep investing in unique mobile app business plans. So whenever you pitch your app idea, be ready with a solid pitch deck to help your potential investors understand you better and your vision for the product. This will also entice them to invest money in your mobile app idea.
After getting the investment, if you are looking for an experienced and reliable mobile app development company, then get in touch with us. Our technical consultants will help you validate your app idea.