How to Find Investors for Your Mobile App: Proven Strategies 

Need investors for your mobile app development? Only around 10% of startups succeed. The main reason startups fail is not having enough money.

There are several ways to turn your app idea into a successful business. Besides having a good app idea, you need a solid business and marketing plan. Most importantly, you need app investors to help fund the development of your app.

Finding and getting investors is crucial for your app’s success. You can do this by learning some proven strategies. In this article, we’ll explain how to find investors for your startup business, helping you navigate everything from app development grants to venture capital. Let’s delve in together!

Types of Investors  

Before you start looking for investors to fund your app development, it’s important to know the different kinds of investors who can support your mobile app development process. Investors can be needed at almost any stage of a startup’s journey.  

• Here are some common types of investors, along with advice on when to approach them. If you want to get funding for your startup, you can consider reaching out to these potential investors for your mobile app.

1. Personal Investors for App Development

In the early stages of a startup, most of the funding usually comes from friends and family. As an entrepreneur, you can turn to people close to you—like family, friends, or acquaintances—to invest in your business, especially when you’re just starting out.  

These app idea investors , a common source of mobile app funding for startups, may or may not request equity in exchange for their support. The good thing is, they often invest simply because they trust you and believe in your idea.  

However, there are some legal limits on how many people from your personal circle can invest in your startup. Also, while it might be easier to convince people you know to support your business, it’s still important to handle everything properly with clear and detailed paperwork.

2. Angel Investors for Mobile Apps  

Angel investors, also called seed funders, are wealthy individuals who invest in startups during their early stages in exchange for a share of the company. These investors can be found in almost every industry, including mobile app development.  

Their main goal is to earn a profit as the company grows and becomes more valuable. Besides providing money, angel investors often offer helpful advice and connections to help the startup succeed, sometimes it could be difficult to reach out to these wealthy individuals but platforms such as angel investing apps can connect you with wealthy individuals seeking to invest in mobile app development.

If your app startup has moved past the initial idea stage but isn’t ready for larger investments like venture capital, angel investors could be a good option. To attract them, you’ll need a strong business plan, a useful app idea, and a convincing pitch. You can connect with angel investors seeking projects to fund  online through emails, LinkedIn messages, or other social media platforms. You can also meet them in person at networking events or conferences.

3. Venture Capitalists  

Mobile app startups usually approach venture capitalists or venture capital firms only after they have started earning a lot of money. These app investors are crucial because they often provide a significant amount of funding for mobile apps.  

Venture capitalists or venture capital firms are investors looking for projects that promise rapid growth and high returns. They focus on supporting entrepreneurs who have shared their creative business ideas and explained why their product or service is needed.  

Unlike other app funding companies, venture capitalists or venture capital firms can also offer advice and support to the tech companies they invest in. They may also take an active role in making important decisions for the business.

But not every tech startup manages to get money from venture capitalists or their firms. The process of getting this funding takes a long time because investors need to carefully check and evaluate the app idea many times.

4. Crowdfunding for App Startups  

Crowdfunding is a newer method for entrepreneurs to gather money for their new businesses. You can collect funds by creating a campaign on crowdfunding websites, where many people can contribute to support your app. A big advantage is that you don’t have to give up any ownership of your company.  

Crowdfunding platforms are often explored by those seeking app development grants. These platforms attract app investors by offering exclusive app access or other perks.

These backers can support your startup in return for rewards, like early access to your app before it officially launches. You can also share a basic version of your app to get their opinions and suggestions.  

You can set the lowest amount someone can invest and decide what perks or benefits your investors will get in return.

5. Banks as App Investors  

For many years, bank loans have been a popular and easy way for startups to get funding. If you choose a small business loan from a bank, it can help you have more control over your startup’s money decisions.  

Many banks and financial companies offer loans with low interest rates for new businesses. However, before they approve your loan, they might ask you to show proof of something valuable (like property) or a steady income.  

Even though the amount of money from a bank loan is usually smaller than what angel investors provide, it can still be a good option. This is especially true if you think your startup will make enough profit to keep going in the long term, or if you need some initial funds to get started before you can attract an angel investor.

Key Factors App Investors Seek When Funding an App Idea

1. A Simple and Expandable Business Plan

App investors want to see a clear plan for how the app will make money and grow over time. A business model that can grow easily is especially attractive—it shows that as more people use the app or the business expands, profits can increase a lot without needing to spend much more money. To attract app investors, ensure your business model aligns with trends in the mobile app development process, leverages efficient mobile app development frameworks, and accounts for the mobile app development cost to demonstrate profitability. This makes investors feel confident that their money could grow significantly in the future.  

2. A Strong Reason to Use the App

Your app should solve a real problem or meet an important need in the market. A strong reason to use your app sets it apart from others, making it something people need, not just another choice. This shows investors that there’s demand for your app and gives them confidence that it can grow and make money over time.

3. Clear Financial Plans  

Having accurate financial plans is key to gaining investor trust. Share detailed predictions for income, costs, and profits, based on realistic ideas. Using careful, well-explained estimates shows you’ve thought through your business plan. These plans act as a guide to making money and show how much investors could earn.  

4. Proof of Progress  

Showing progress proves your app idea is more than just an idea. Numbers like how many users you’ve gained, how much money you’ve made, or partnerships you’ve formed show that people are interested in your app. Progress tells investors your app is already moving toward success, making it seem less risky and more likely to grow and make money.

5. Skilled and Dedicated Team  

A successful app project relies on a capable, skilled, and dedicated team. Investors want to be sure that the team has the knowledge and drive to carry out the business plan well and handle any challenges. A team with a history of success can give investors confidence that the business has what it takes to grow and succeed over time.  

6. Growing Market Potential  

Investors are interested in ideas that target a big and growing market. Your app concept should be supported by detailed research that shows the market’s size, how it’s growing, and who your target customers are. This information proves that the app can grow, generate strong revenue, and meet a real need in the market, helping it stand out in its field.

How to Gain and Keep the Trust of Your Business Investors

Building and keeping trust is very important when working with investors seeking projects to fund. Start by being transparent about your mobile app development progress and challenges.  This makes it easier to get money, expert advice, and connections in the industry.

Clear financial plans and research into AI regulations will also strengthen trust, showing you understand the business landscape and market demands.

Trust is a strong base for growth, new ideas, and the ability to handle tough times, giving you a big advantage. To build trust with investors, try these steps:

1. Be Open

 Keep investors updated about how the business is doing, its finances, and any problems. Share detailed reports, financial statements, and updates on progress regularly. Being honest about difficulties shows you have strong values and makes people believe in you more.

2. Check Your App Idea with Investors

Before talking to potential investors about your app idea, it’s important to make sure that your idea hasn’t already been turned into an app by someone else. This is what the discovery phase is for. 

In the discovery phase, make sure to look for any similar apps already available or study existing ones to see how you can make your app better. This step can help confirm that your app idea is unique and avoid any unexpected issues later on.

3. Find the right market

Before deciding on the features to include in your app, you should first look at the competition. Check out other mobile apps in your market or services that might not be app-based but still compete with your future product.

Once you understand the market your app fits into, you’ll be in a better position to improve your app and spot any gaps in demand or supply after it launches. You’ll also learn about your competitors’ strengths and weaknesses.

4. Find out how big your app’s market is  

By researching the market, you can figure out its size by looking at other apps that compete with yours. Identify who your app is for and how much of the market you can capture. This will help you give real numbers to potential investors about the opportunities and risks.  

Also, understanding your app’s market size will help you create better plans for pricing, selling, and promoting your app.

5. Learn the basics of investing

To gain the trust of your investors, you need to understand the basics of managing a startup and how startup funding works. This will help you determine the type of funding you need and the different stages of investment.

Additionally, knowing about startup funding will help you be more flexible, make better and faster decisions, solve problems quickly, and come up with new ideas more often.

6. Build an MVP or Demo App  

You can start by creating an MVP (minimum viable product) for your app. An MVP is a basic version of your app that works but doesn’t have all the features you plan to add later.  

Another option is to make a demo version of your app. A demo is a fully working app that includes most of the features you want to include in the final version.  

These options are great for investors who have a limited budget and can’t afford to fund the full development of your idea. An MVP or demo can help investors see the potential and value of your app.

Stages of Startup Funding for Mobile Apps

The app development process is often funded in five stages. Each stage marks an important step in the growth and development of your app, and each comes with different funding needs. Let’s look at these stages in detail:

• Pre-Seed Stage: Building the Base  

In the pre-seed stage, your focus is on building the base for your app. This includes doing market research, improving your app idea, and creating a basic version of your app (called an MVP). At this stage, funding usually comes from your own savings, help from friends and family, or using your own resources.  

Pre-seed funding can be anywhere from a few thousand dollars to around $500,000 on average.

• Seed Stage: Making Ideas Real  

In the seed stage, you take your ideas and turn them into actual products. You also check if people are interested in buying them. This step includes improving the product, testing it with users, and starting to promote it. Money for this stage usually comes from angel investors, early-stage venture capital companies, or crowdfunding.  

The average amount of money raised at this stage is between $500,000 and a few million dollars.

• Series A Stage: Growing and Expanding  

The Series A stage is when your business starts to grow quickly and reach more people. By now, you’ve shown that your product fits well with what customers want, and you’re ready to attract more users and grow your market. During this stage, venture capital companies invest larger amounts of money in your business in exchange for a share of ownership.  

The amount of money raised in Series A funding can be anywhere from a few million to tens of millions of dollars.

• Series B Stage: Growing Your Business

In the Series B stage, your app is all about reaching more people, getting more users, and making more money. The money you raise at this stage is usually used to grow your business, make your systems better, and promote your app.

Venture capital firms are still the main place to get funding, and the amount of money raised in Series B can be anywhere from tens of millions to hundreds of millions of dollars.

• Series C and Beyond: Taking Over the Market  

Series C and later stages are when well-established apps focus on becoming the top player in their market, expanding to other countries, or creating new products. At this point, funding usually comes from big investors like venture capital firms, private equity firms, or through buyouts by larger companies. The amount of money raised can range from hundreds of millions to billions of dollars, depending on the app’s success and goals.  

Keep in mind that these funding amounts are just rough estimates. They can change a lot based on things like the app’s industry, how fast it’s growing, competition, and how much investors believe in its potential. Also, getting funding at any stage isn’t guaranteed. Your app startup needs to show strong growth, a good position in the market, and a clear business plan to attract investors.

How much money do you need for your app startup?

When it comes to figuring out how much money you need for your app startup, there’s no set amount. The exact cost depends on your app idea, how complex the app is, your team, and other factors. For example, a simple app with basic features (called an MVP) might cost between $15,000 and $50,000. A more advanced app that works on multiple platforms and uses APIs could cost between $50,000 and $200,000.

Don’t stress, though—we’ve already talked about ways to raise money for your startup. But before you approach investors, work with your app development team to estimate the cost of building your app, its features, and its main purpose. Without a clear budget, you might make financial mistakes that could hurt your chances of success.

If you get less money, you won’t be able to even begin developing the app. But if you get more money than you need, you might have to give up part of your ownership or even your company to the investors.

What should you do after your app gets funding?

After you get money from investors, what comes next? Your job isn’t over yet. Your app needs regular updates and care. 

Once your app is out, keep making it better and listen to feedback from users and investors as you grow. As your startup gets more funding at different stages, you can use the money to buy other companies, form partnerships, improve your brand, explore new markets, and keep developing and upgrading your product.

Final Thought

Getting money for your mobile app is just the first step in your business journey. After raising funds, your success will depend on how well you can keep coming up with new ideas, earn the trust of your users, and adjust to a changing market. 

Whether you’re targeting angel investing apps, venture capitalists, or crowdfunding backers, remember that a great app idea, supported by a hardworking team and a clear vision, will always bring the right opportunities. 

Stay focused, listen to feedback, and always aim to provide value to your users—this is the best way to turn your app startup into a successful business.

Frequently Asked Questions (FAQS)