I have a great idea for an app but no money, where do I start?
At HITORI we regularly receive enquiries from people with a great app idea but no funds to start the app development process. This is the unfortunate reality for most startups, entrepreneurs and new businesses; I know it was for us — it’s a shame as a good idea should see light! So where do you start?
Startups come in many shapes and sizes, from fully VC funded to self-funded & bootstrapped. To create a tech startup (an app in most cases) you need money, how much money you need depends entirely on the kind of app you would like to develop; if you are looking for a simple locally run app with minimal functionality targeting only 1 platform (i.e. iOS/iPhone) a simple MVP could be as little as 10k, if you want a more complex app which relies on a back-end API server, runs on both iOS and Android and has a front-end web app version as well you would be looking more around the 25–100k mark; but again this purely depends on the functionality; we can help you scope out the requirements and provide you with a written quote estimate.
So what are your startup app development funding options? Here are 5 of the top funding avenues you could look at to help with your app development budget:
- Bootstrap & Self-fund from Personal Savings
No doubt the best approach if you want to retain complete control and ownership of your new app or digital product. Self-funding allows you to invest your own savings in yourself; your idea, your business. It is an easy start and you can commence straight away. Many very successful businesses (even in the startup world) self-funded and remain self-funded. If you are keen on bootstrapping (which you should be!) you need to keep marketing in mind once your app is built which also requires funds (such as Facebook ads & Google AdWords); there is a great course from Stanford I’d suggest all budding entrepreneurs take (you can watch the entire course on YouTube).
- Friends & Family
Another good option to keep on the Bootstrap route is to pitch your idea to your friends and family (especially if you know they are cashed up!); I’d suggest you should pitch your idea professionally almost as if you would a true investor you do not know, it is at the end of the day a business transaction and they will no doubt want to know the ins and outs of how your app will make money and more importantly get them their money back! Note: working with f&f can have major impacts on relationships if things do not go well so consider this funding idea very carefully before moving ahead!
- Personal or Business Bank Loan
Just like you can get a loan for a car you can get a loan to start a business (or an app/website), you will need to go through the standard forms, Q&A’s and alike the bank or financial institution will throw at you and demonstrate (likely on paper) how your app business will make money moving forward, we can assist you with a quote and additionally a nice glossy proposal (for a minimum fee) for you to submit with your loan application.
- Private Investors
Is your app idea targeted at a specific industry? Why not pitch the idea to some high flyers in the appropriate industry? If you find the right person they may be willing to fund the entire web &/or mobile app development build for a % stake in your business. This again has it’s downsides as they will also likely want input on how your business is run; BUT it can offer many advantages such as industry knowledge and connections.
- Venture Capital (VC firms)
VC is the route many of the major players go in the startup world; or eventually go when they scale big time. Think Uber, AirBnb, Facebook, LinkedIn. The VC route takes time, you will need a true A game pitch and be ready to have your idea molded into how the VC firm see’s the fastest route to success and a monetary return on their investment in you and your idea. This is your quickest way to the big time, but not everyone gets funded and if you do there is still no guarantee of success; BUT this is a great start, if you can get VC at an early stage and are willing for the ride that’s very good news for you! Keep in mind if you don’t start with VC that doesn’t mean you can’t get it later, in many cases it may be best to get your app idea off the ground by bootstrapping and then going for VC at a later date; who knows you may be the next Basecamp or MailChimp!
In addition to the above there is many online platforms to generate investor interest with a view for funding, one of the most popular is AngelList.
I hope the above helps or at least provides a few ideas on where to start with getting funding for your app development idea, any questions please reach out, we’d be happy help. In addition to providing startup app development I could also act as your technical co-founder / CTO (for a fee or equity stake).