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You have got a brilliant app idea.
You want to build the app and start a business around it. But you do not have the money. You are not sure how to get funding for app development.
Is this situation familiar to you? We are here to help you.
Developing a mobile app is a massive task.
Along with time, you also need a lot of funds to build a unique, user-friendly mobile app that stands out in the market and earns you a profit.
You need money to develop an app, hire app developers, and create a business plan. In fact, often you even need money to pitch your ideas to investors.
In this blog, we detail how to get funding for app development ideas in the UK.
There are many ways to get funds for developing your app such as approaching angel investors or crowdfunding.
To be sure there are a lot of ways to develop a mobile app or a web app for a very negligible amount.
There are low-code and no-code platforms that you can subscribe to and use for developing an app quickly.
You can even learn to code and try your hand at mobile app development.
So why do you need money to build an app?
Quality. If you are planning to create a full-blown business around your app, then your app needs to be top-quality. This is the foundation of your startup. It has to be exceptional in quality to attract customers and retain them.
You need to integrate top features in your app and provide a seamless user experience.
You also need to ensure that your app is scalable, so it grows with your business in the future.
This is not possible in low-code/no-code platforms.
You need experienced UK app developers who will develop a clean, attractive mobile app as per your custom requirements. And for developing a custom mobile app, you need funding.
There are a lot of factors to consider when you calculate the cost of developing a mobile app.
There is obviously the money that goes into app development, but there is also the cost of hiring a development team, getting a workspace, getting the necessary permits, marketing, and more.
You have to calculate how much funding you need from start to finish to develop and launch an app successfully. Only then you can start approaching investors.
First things first, you have to get an estimate for your mobile app development cost.
A basic mobile app development costs around a few hundred dollars. But complex custom-built apps can cost thousands of dollars to develop and maintain.
You need to figure out how complex your app is going to be - what features and functionalities it will include, what platforms and OS the app will support, the UI-UX development, and the number of developers, designers, and engineers you need.
After getting a mobile app development estimate, add up the costs of infrastructure and legalities.
Consider everything you need to launch a business - from permits and insurance to office supplies and equipment.
Now that you have an idea of how much funding you need to develop an app, it is time to start approaching potential investors.
Are you faced with this dilemma - “I have an idea for an app but no money” or “how to find investors for my app?”
Oftentimes, even if we have the idea and skills to create a great app, we just don't have enough funds to kickstart it. But that is no reason to get disheartened. There are many options available for finding financial aid for an app development project.
According to Beauhearst research on equity investment, there was €19.7 Billion of funding in UK startups in the year 2022. So there is a high chance that your app development idea will also get the necessary funding.
Here are 5 ways to get funding for app development:
Let’s discuss these funding methods in detail to understand how to get mobile app funding.
One of the best ways to get funds for app development is to find a co-founder.
There is no one more suitable for investment than someone who believes in the app you are building.
A confounder will be as invested in your idea, and in your business as you.
The person will help you out with the initial capital required, and also help you throughout the whole mobile app development process.
You can get a partner who will divide the responsibilities with you. But it is important to be careful when choosing a co-founder.
The person has to be trustworthy and have a good rapport with you. Generally, finding a partner from within your personal network is advised. They tend to be more supportive, loyal, and helpful.
There is also another thing to consider when looking for a co-founder - what skills they bring to the table. Analyze what skills you have, and what additional knowledge you require to build and launch an app.
For example, if you have a solid idea but don't know much about coding an app, it is better to find a tech-savvy person who can help you coordinate with the development team, and build the technology.
Or if you are not aware of taxes, accounting, and management of funds, get a co-founder who has an understanding of the financial aspect of launching an app.
Venture capitals and angel investors are one of the most popular ways of securing funds for mobile application development.
They provide large sums of money in exchange for equity shares in your business.
This is a very lucrative funding option for most startups in the UK for two reasons.
One, you get business expertise along with financial aid. Secondly, and this is important, if your app fails, you do not need to pay the money back.
Both types of investors fund an app and get a share of your business profits in return. Investment for startups from venture capitalists and angel investors is increasing steadily in London.
But there are some important differences between angel investors and venture capital investors.
Venture capitalists are professional investors who are in charge of managing the funds of other people like wealthy patrons, businessmen, and other investors.
Venture capitalists invest their client’s funds into various businesses and startups. In fact, Venture Capital investment in the UK reached $31B in 2022 according to Dealroom.co.
Angel investors are high-net-worth individuals who invest their own money in early-stage startups and businesses.
They want to grow their portfolio and support unique startups that have high potential.
Depending on the app development phase you are in, you should decide who to approach for app funding.
Angel investors generally prefer to invest in early-stage startups - businesses that have a clear app idea and need help in developing it.
They are also professional investors and entrepreneurs themselves. Thus angel investors also bring in their own skills and business expertise along with providing financial help.
They may also have contacts in the industry that can help you to grow your business. Since they are investing their own money, many take a vested interest in the day-to-day workings of your app.
Venture capital investors, on the other hand, invest a lot more capital into businesses.
So they expect to invest in app ideas that have high growth potential. They almost exclusively invest in mobile apps that are in the last stages of development or already in the market.
Another major difference to consider is the amount of funding. Since venture capital firms invest a large amount they expect a larger stake in your business.
Moreover, for getting such large sums of money, your business also needs to justify its usage.
So if you are in the early stage of development, it is advisable to approach angel investors first.
You should approach venture capitalists after you have developed the first iteration of your mobile app and plan to expand.
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Crowdfunding is a popular and effective way to get funds for app development. It generally means raising money from a large group of people, through online crowdfunding platforms.
There are many crowdfunding platforms such as Kickstarter, Crowdcube, Indiegogo, and GoFundMe that are popular in London.
By choosing the right platform, and appealing to the right group of people, you can raise enough funds as needed.
It is important to choose the right platform that is popular within your industry and has a history of funding similar projects.
By creating a compelling crowdfunding campaign and marketing it well, you can achieve your fund goals.
Crowdfunding is a great way to spread awareness about your app too. Along with funding, many people pay extra for early adoption or premium features.
You are basically marketing your app idea and generating interest. There may also be people who don't have funds but may offer their expertise.
It is not a full-proof way though.
It is hard to get people invested in your projects. So it is important to make them realize why your app is needed right now. And give regular updates on your project status to all of your backers.
A grant is a monetary gift given by an organization (government, NGOs, companies) to an individual or a group for a project.
The grant can be given for a variety of reasons - societal impact, economic growth, environmental help, innovative solutions, and more.
Getting a grant is a great way for getting funds without giving away equity or ownership of your business.
There are many government and public initiatives in the UK that offer grants for app development. With some research, you can find a bunch of grants you can apply to for funding.
Websites such as GrantWatch and ukstartups.org are a good start for finding grants. Make sure to look for grants that have a history of funding projects similar to your app.
Each grant is created for a different purpose. So when you apply for any grant, make sure to highlight why your app is eligible for receiving that grant.
It is important to note, that an app that benefits the society or economy in some way has more chances of getting a grant.
There are many business funding contests available. Although each contest has a different format, most connect potential investors with startups and entrepreneurs.
Most funding contests are sponsored by different companies, tech organizations, universities, and investor networks.
But it is important to do diligent research and preparation before entering a contest. You need to have a clear app idea, funding requirements, customers, competitors, and a well-thought-out business plan.
Funding contests work for app ideas that are revolutionary or innovative or built on disruptive technology. So make sure you are confident and ready to compete against hundreds of other app developers.
Although there are also pros to entering funding contests. You can market your app to a large audience in a funding contest even if you do not win.
Sometimes, you may also attract out-of-contest offers or get help with other resources.
So you know how much funds you require, and who to approach, but it is not like you can randomly call up people and ask for an investment of such large sums.
Neither can you send cold emails and hope for a response.
There is a process to follow to increase your chance of success. You need to convince investors to provide funding for your app instead of others.
This means you have to be absolutely certain of your app idea and be ready to answer any questions the investors pose.
We recommend asking yourself these questions before you approach potential investors:
It's important to have well-thought-out answers to these questions before approaching potential investors.
This will show that you have a solid plan in place and increase your chances of getting the funding you need for your app development.
We hope this blog has answered all your questions about how to get funding for app development.
It is important to analyze your app and decide which funding pathway is best suited for you.
Getting funds is a lengthy and competitive process. You may receive many rejections before you get funding.
But with a solid business plan and a unique and profitable app idea, you are sure to secure the required funds.
A clear plan on how you are going to use the money and how you plan to return it with profits is the best way to convince investors.
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