How to get investors for an app
Many people desire to find out how to get investors for an app. A successful startup entrepreneur must do four things when trying to raise capital for their mobile app idea:
1) They cannot let rejection keep them down.
2) They must develop an interesting story for their startup mobile app.
3) They need to be able to contact the proper people.
4) They must be resilient and persistent.
It’s not easy to get investors to fund your app idea. Rejections are going to be experienced a lot. Do not expect to land a deal so easily. But if you keep trying to get funding from different investors, you will eventually find one that will like your idea.
When you go to make your pitch to them, they are going to look closely at your product story the most. If the story is exciting to them, they will be quick to offer you a line of credit to develop your startup app. If it is boring or unimpressive, they will give you nothing. So, you need to develop a marketing strategy for your product pitch or there will be no sense in asking how to get investors for an app.
However, even if you are persistent and have a good product story to tell, none of that will matter if you aren’t presenting your pitch to the right investors. Instead, you will just be wasting time which would be better spent looking for a reliable mobile app development agency for your startup app idea.
To set you on the right path, we’ve listed four tips below which will help you obtain meetings with the right investors and venture capitalists. These are people who will be interested in providing you with startup capital for your product idea.
1. Create Traction Early On
The first answer to how to get investors for an app. It is not enough to just present investors with an interesting mobile app idea. They want to see that you have a vision for the future. More importantly, they want your product to already have traction.
What is traction? In the business world, traction means that your product has interest and popularity amongst customers. So, if you give a demo of your new product to trial users and they give it positive feedback, this would be traction. You can also gain traction from repeat customers, distribution agreements, getting other investors to put their money up for it, media reporting, forming partnerships with other companies, and so on. If other reputable entrepreneurs and investors are endorsing your startup app, then it will be easier for new investors to feel comfortable taking the risk of funding your startup.
AngelList CEO Naval Ravikant made a post on Quora a couple of years ago which listed the social proofs that you need to have. They are as follows:
- A major investor may be investing for the first time or investing more than usual. The terms of their investment will be completely the same as the next new investors that you are trying to attract.
- An investor that does not have a well-established reputation will still want to invest under the same terms as new investors.
- A major advisor or entrepreneur is putting their reputation on the line to recommend your product and company.
- An advisor or entrepreneur who is not as well-known will give your company their recommendation.
- An investor decides that they do not want to invest money in your business.
When reputable investors are recommending your product or company, they are really saying that you as a person worth the investment.
Mark Suster was an entrepreneur and the founder of the company “Upfront Ventures.” He ran a blog entitled “Both Sides of the Table” where he stated that traction involves establishing a relationship with a venture capitalist throughout a period of time. The goal is to show them that you know what you are doing.
Suster wrote another post called “Invest in Lines, Not Dots” which discussed the way in which he invests in entrepreneurs. Below is a visual that he shared in his post:
It takes more than just one meeting for him to invest in app idea. He will want to spend additional time to establish a relationship with the entrepreneur and analyze the traction. After each meeting, he understands a little more about how the entrepreneur operates.
Here is Suster’s recommendation for any entrepreneur trying to raise capital funds:
Meet your potential investors early. Tell them you’re not raising money yet but that you will be in the next 6 months or so. Tell them you really like them so you want them to have an early view (which is what all investors want).
It’s an amazing advice.
If you can establish a relationship with an investor before they give you any money, this will make it easier for them to trust you. At the same time, it will motivate you to keep working on that relationship until the day comes when the investor decides on their own to fund your startup app idea
2. Search for the Right Investors
Second advice on how to get investors for an app. You can use the network of prospective investors to try and connect with them. To succeed in most businesses, you need to establish relationships because they will give you the opportunities to meet new people who could benefit your business. But don’t just blindly start introducing yourself to these potential investors. Figure out which investors that you are interested in connecting with. To find the right ones, conduct a bit of research into their previous investments. Have they invested in companies like yours in the same industry? If so, this is a good thing as long as they haven’t invested in your competition.
For instance, let’s say you want to raise funds to develop an AI system that works to prevent retail store theft. In this case, you will want to find investors that have a history of investing in AI systems, but for something other than retail theft. Maybe they’ve invested in AI systems that analyze pesticide use on farms. As long as it is similar but not competitive, then you have found a good investor.
The Internet is an easy-to-use tool for finding the best investors for your company. You may even be able to locate their email addresses too. You can begin by looking at websites like AngelList, CB Insights, and Mattermark. These websites let you thoroughly research various companies and find out who invested in them.
After you have picked out the right investors, you can use the Hunter.io Email Finder tool to find the email addresses of these investors. This tool will immediately collect a variety of information and then give you the proper contact information of the investors.
However, if you are going to email a prospective investor, only do so if you are desperate. It is always better to establish a connection with the investor first. Maybe you have found them on LinkedIn and you have a shared connection with them. Perhaps the investor is associated with one of your Twitter followers. If that’s the case, request an introduction from that person.
If your connection is popular and well respected, then your introduction will be received much better.
3. A lot of Commotion in Internet Communities
Advice on how to get investors for an app number three. Internet communities hold a lot of power. There are websites like Designer News and Dribbble that are devoted to people who are interested in designing. Then there are websites like Hacker News which are hangout spots for software app developers. You can find niche communities all over the internet to suit people with their own particular interests.
Angel investors and venture capitalists love online communities because it gives them perspective on the next big trend to hit the marketplace. You will find a lot of investors looking at Product Hunt, which is a popular community devoted to new startup app ideas and products.
The other people who go to this community are submitting to it their own websites, apps, physical products, and digital tools for others to see. The people of the community will then vote on how much they like them. The products which get the most positive votes are going to get a better ranking on the website. This is what investors are paying attention too.
Product Hunt has many types of international visitors, such as media professionals, influencers, and investors. If you go to Product Hunt and submit your product to it, this is the first easy step to successfully launching your product because buzz will be created very quickly over it. Once investors see this buzz, they may be interested in investing in your mobile app startup.
Hacker News is another community that is frequented by venture capitalists. It has helped a lot of startups become successful, such as Dropbox. If you are going to use Hacker News to present your product, then you should set aside enough time to answer the questions that other community members are bound to have. You may even get lucky and end up communicating with a prospective investor.
4. Go to Startup Events Locally and Far Away
The last tip on how to get investors for an app. Relationships are so easy to build now because of technology. You don’t even need to meet people in-person either. However, it can still be a valuable thing to have physical interactions with people. A lot of the bigtime investors will only conduct meetings in-person because they feel it is more professional that way.
If you want to meet the right kind of venture capitalists and prospective investors, then you should go to a startup event. This could be a meetup, pitch competition, industry conference, and so on. At least you will have a chance to connect in-person with other entrepreneurs, investors, and startups. It can also be an educational experience by learning from entrepreneurs who’ve already found success.
When looking for prospective events to attend, you don’t have to just attend popular local events. In fact, it is usually better to look at events taking place in out-of-town markets. This will give you the chance to meet more investors and seek out more opportunities to strike a deal. Even if you must purchase an airline ticket and fly on a plane to get to other markets, then it is worth it.
What to Do Now
You need to act now. You can’t just follow a couple of venture capitalists on Twitter and call that communication. You need to take action in order to get noticed by them.
If you are creating a new iOS or Android app and you need assistance in launching it successfully, then contact us today. We’ve helped many startup entrepreneurs with their mobile app ideas by creating MVP and we will do the same for you.
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