You have a great app idea. But how can you be sure it will secure funding from investors and the like? Finding investors may seem a daunting task at first – but with the right information and through whetting your networking and sales skills you can make venture capitalists and angel investors invest in your app idea.
There is a common misconception that Venture Capitalists (VCs) and angel investors are the sole sources to get funds to develop your app. There are other sources such as crowd-sourcing, bootstrapping, partnering, self-funding etc., to try your hands on.
It is not very easy to magnetize investors into your app venture. In the same way as you are hunting for a suitable investor by looking at certain characteristics to ensure the right fit, investors also seek for certain attributes that will excite them to invest.
Attributes that Investors look for to invest in an app idea
Let’s have a quick look at some of the features that investors expect from an app idea and the app entrepreneur.
1. Convincing and Credible App Idea
Okay…..You are convinced that the app idea that you are incubating is spectacular and valuable. But if you are not able to communicate the same with the prospective investor, everything is in vain. If you have a credible app idea with perfect functionality and other usable features, you need put across the same to the investor in a convincing manner. This is important because most investors are ready to put in their money into an app idea, only if it has convincing features. When the investors do a risk-reward analysis, an idea that has superior chance of making returns will get attention. Be ready to answer a whole lot of questions that prospective investors will ask you regarding the potential market and the competition for you app, revenue-generating aspects of the app, and the opening and ongoing cost.
2. Execution as a Core Aptitude
Investors treat the aptitude of the prospective entrepreneur to execute the app idea into reality as a valuable trait. Having a great idea for anpp does not verify anything. But the app developer’s core competency to implement the business into practice makes a huge difference. App history shows that with the right knack, many app entrepreneurs have turned some ridiculous-sounding app ideas into successful and well-appreciated apps. If the investors believe that the entrepreneur will fill the gap between great idea and great product (here, app) with tremendous amount of efforts and endurance, funds are mostly guaranteed.
3. The Team Behind it
Remember that people are more important than ideas, and this is even more true in the case of angel investors. If you have a rock star team behind the app development plan, the chances are more for your app to attract funds effortlessly. A competent team loaded with the necessary skill-set enhances the investment-worthiness and credibility of the project. A team that has demonstrated best performance in delivering goals in a time-bound manner is a huge plus for prospective investors. Create a committed and knowledgeable team before you reach out for investors.
4. Experience of the Entrepreneur
Seasoned entrepreneurs are more likely to get funds when compared to new players. But an enthusiastic and brilliant new entrepreneur with great app ideas can make their offer look more appealing by finding a veteran administrator or entrepreneur to join their team. Prospective investors will be pleased with the presence of traction. They will also try to understand the entrepreneur’s reputation and position in the market. If they feel that your product will definitely threaten your competitors, they will be ready to pour in their funds.
5. Customers Whom the App Target
Besides looking at the the idea, the team, the entrepreneur, the team’s credibility etc., investors also verify the potential customers your app is targeting. The target customers of the app is a decisive factor for the funders. They will do an analysis on the marketability of the app among the customers. This might include the features that prompt them to make more downloads, their readiness to pay the price, and the reasons they find to consider this app as superior to other competitive apps.
A Word of Caution
Approaching the right investor is very crucial while finding funds for your app idea. You may be wasting your valuable time by pitching to the wrong investors. Target investors belonging to your niche area, and those who will love to invest in the kind of app that you develop. Seek investors with technical know-how to make things easier. Understand the areas of core competency of investors, and approach accordingly. Spend time researching on prospective investors, and stay away from committing the mistake of cold calling any investors.
Don’t expect that any venture capitalists will invest in your app idea business just because you have a revolutionary idea. Investors tend to invest in those app ideas that exhibit certain invest-appealing features and those that they see minimal risk in. Hundreds of apps are getting launched daily and ensuring return on investment is their objective. After all, they are spending money to get more money!
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