different ways to raise money for an app?

[kshy]

I've done quite a bit of research, but was hoping on getting feedback from actual people that are familiar with the process. So my buddy and I want to launch a mobile app, the concept is not new there are apps with the same idea out there, but we just added our twist to it so it could tap into a niche market place that we have a good deal of knowledge in and necessary marketing tools to gain traction.

None of us have any familiarity with app development, but we were able to build the wire-frames for the app and have a good idea on the features we need available on it. We have talked to a developer, but the price that was estimated was way, way higher than we had in mind.

His recommendation was to present the idea to a lawyer that would be interested in the idea, offer him equity in the company and from there, the lawyer will put together all the necessary paperwork to reel in investors to raise money. We aren't too sure on how common this process is, and if it is the best route to take? Or would it be better to try and raise money through investors by cutting the lawyer out of the equation? How feasible is this with an app that has no proof of concept yet because we can't launch a viable version without the necessary funds?

Or, we've looked into websites like alakazamapps. Is anyone familiar with these sites? and would this be the best way to get a minimum viable version of the app out there just as a proof of concept? Are there big downsides to using these kinds of sites? It is a lot to read, but basically would like to know the best route to take on raising funds for an app to start the development process?

 

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[BigBrianC]

Make money doing whatever you're good at doing.

Hire a developer.

That's the best way. That's the most viable way. That's the most feasible way.

 

[kshy]

Make money doing whatever you're good at doing.

Hire a developer.

That's the best way. That's the most viable way. That's the most feasible way.

It's the hiring part that's the problem. We don't have anywhere near the amount of money a front and back end developer would cost.

 

[Carlitos]

Make money doing whatever you're good at doing.

Hire a developer.

That's the best way. That's the most viable way. That's the most feasible way.

And then making sure you have in writing that the developer is just doing his work, and owns no rights to the app correct?

 

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[kshy]

what about giving a certain percentage of equity to the developer if you can't afford to pay him at the time he's working? but then if something goes wrong and you want to part ways later on, is that still possible even if he has a certain equity stake?

 

[kshy]

It depends on how much you're looking to raise? $10K? $100K? $500K? More?

And how much do you and your partner have to contribute in either/both cash and/or time?

to raise estimate 75-100k. We can put up close to 20%. As for time, how much time do we have or are willing to commit? as for a deadline we don't have one, but we also don't want to just sit and take it at a slow pace. We're willing to commit full time to it.

 

[Guest34764]

His recommendation was to present the idea to a lawyer that would be interested in the idea, offer him equity in the company and from there, the lawyer will put together all the necessary paperwork to reel in investors to raise money. We aren't too sure on how common this process is, and if it is the best route to take? Or would it be better to try and raise money through investors by cutting the lawyer out of the equation? How feasible is this with an app that has no proof of concept yet because we can't launch a viable version without the necessary funds?

How much equity?It's almost always a bad idea to give up equity before you even start.

75-100K is a lot of money, make sure you know where all of that is going.

Take it slow, raise most of the money yourself and if this pays out, you'll retire.

Take it fast, give off equity and if it pays out, you'll retire with less than you deserve.

You'd kick yourself in the a$$ if you found out you just gave up 2.5Million because you couldn't raise 75-100K yourself.

You should build a side business with the purpose of using that money to further this venture, and both of you should be putting money from your jobs into this too.

You can commit to something without speeding through it, take your time and don't make regrets.

 

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[kshy]

How much equity?It's almost always a bad idea to give up equity before you even start.

75-100K is a lot of money, make sure you know where all of that is going.

Take it slow, raise most of the money yourself and if this pays out, you'll retire.

Take it fast, give off equity and if it pays out, you'll retire with less than you deserve.

You'd kick yourself in the a$$ if you found out you just gave up 2.5Million because you couldn't raise 75-100K yourself.

You should build a side business with the purpose of using that money to further this venture, and both of you should be putting money from your jobs into this too.

You can commit to something without speeding through it, take your time and don't make regrets.

We don't know how much equity he would've wanted because we never followed up on the lawyer path that he recommended. You're right, we don't want to give up a stake this early. But to raise the 100k by just saving up is going to take us a very long time. We just want to put out a very minimal version of the app out on the market and want to know what the best way to accomplish this would be.

 

[Random_0]

Just because developing apps can be money making platform to monetize doesn't make it one for everyone, especially people with no experience.

I'm fairly sure there are companies that churn out dozens of well made and functional apps and don't profit on a huge majority of them and who base their business model on the fact a majority of app ideas don't succeed

The fact you're not currently able to afford it do you really think the risk is worth it?

EDIT:

Factor in marketing, and literally every other expense you can think of

Fair enough being motivated to do something, but you're going to have to be more realistic than to think "finding X amount of money will solve my problems"

 

[AustinS28]

How many developers have you talked to?

Sure maybe the full product takes 75-100k or more of work.

You mention MVP....it shouldn't cost 75-100k or even close to develop an MVP and get going from there. It'll be easier to attract investment when you have a user base and data to make more accurate decisions.

I'm in the process of having an app developed that is similar...there are others, mine puts a spin on it for a certain industry that doesn't have this service specifically for it and I know there is a need because it's what my other business is in...

Long story short, I'm bootstrapping...when there is a will there is a way.

Look around. Outsource if need be. Don't expect the first version to be anywhere near perfect. Read the lean startup.

 

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[kshy]

How many developers have you talked to?

Sure maybe the full product takes 75-100k or more of work.

You mention MVP....it shouldn't cost 75-100k or even close to develop an MVP and get going from there. It'll be easier to attract investment when you have a user base and data to make more accurate decisions.

I'm in the process of having an app developed that is similar...there are others, mine puts a spin on it for a certain industry that doesn't have this service specifically for it and I know there is a need because it's what my other business is in...

Long story short, I'm bootstrapping...when there is a will there is a way.

Look around. Outsource if need be. Don't expect the first version to be anywhere near perfect. Read the lean startup.

The lean startup is where I learned about the MVP. And yea, once we heard the price that's why we backed out of it. We do want to release as simple a version as possible but we want to know the possible options available for doing so. Are you outsourcing as in getting a developer to create an MVP for you? How are you getting it started if you don't mind me asking.

 

[kshy]

Where are you located? Do you have a basic business plan? If so, feel free to send me a copy... I do some angel investing...

I don't have a business plan yet because my partner and I weren't sure in the beginning that we were going to need investors. I am located in NYC. Thanks for letting me know, but that's something I'll have to discuss with my partner only because we're so early in the stages we want to see if we can get the app out there with the money we have raised up.

 

[AustinS28]

The lean startup is where I learned about the MVP. And yea, once we heard the price that's why we backed out of it. We do want to release as simple a version as possible but we want to know the possible options available for doing so. Are you outsourcing as in getting a developer to create an MVP for you? How are you getting it started if you don't mind me asking.

So I looked around for about 8 weeks interviewing developers off guru and upwork. I narrowed it down to two companies. One in India wanted $4800 and a US company $13k....I got discouraged with the company from India because of their lack of communication. They wanted the job bad but were often unavailable on skype. I didn't want to start a project with a company I couldn't easily get ahold of.

Fast forward - somehow this year I was blessed or whatever you want to call it with 5 clients who develop software full time for a living. One has start up experience and built out a company for four guys who do mobile advertisement. He has equity there and works as the lead software engineer. He's got almost two decades of experience.

He's building the MVP in exchange for me not charging him for my services. It couldn't be going better and the quality of work and amount of work is far superior to what I expected from hiring overseas.

I created a user story map. Then basically on Trello assigned these stories priority...which were included in the MVP, which for later versions.

We sit down together every two weeks for two hours to discuss what's being done, what we like what we don't etc.

Could not be happier with how smoothly things are going. I will have to hire someone for design work.

I'm in NYC too btw.

 

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[kshy]

So I looked around for about 8 weeks interviewing developers off guru and upwork. I narrowed it down to two companies. One in India wanted $4800 and a US company $13k....I got discouraged with the company from India because of their lack of communication. They wanted the job bad but were often unavailable on skype. I didn't want to start a project with a company I couldn't easily get ahold of.

Fast forward - somehow this year I was blessed or whatever you want to call it with 5 clients who develop software full time for a living. One has start up experience and built out a company for four guys who do mobile advertisement. He has equity there and works as the lead software engineer. He's got almost two decades of experience.

He's building the MVP in exchange for me not charging him for my services. It couldn't be going better and the quality of work and amount of work is far superior to what I expected from hiring overseas.

I created a user story map. Then basically on Trello assigned these stories priority...which were included in the MVP, which for later versions.

We sit down together every two weeks for two hours to discuss what's being done, what we like what we don't etc.

Could not be happier with how smoothly things are going. I will have to hire someone for design work.

I'm in NYC too btw.

I know the struggle with hiring someone overseas. I had work done for a previous unrelated project and hired someone in India. Communicating was very difficult, timing and also their lack of English made it even more of a struggle. Although it is cheaper, I would not want to go through that hassle again, and the quality was another issue, but couldn't argue cause of the price I guess. That's why from then on I do try to work with people in the US as much as I can.

I did check upwork for developers, that has been what I am leaning towards the most. I just wasn't sure how it would work if we need someone to constantly maintain the back-end of the app, if something crashes or updates need to be made. It's good to hear that you were trying that too, being the most feasible I guess that's what I'll look into and ask the developers from there.
If you actually wouldn't mind, would you be willing to share the software developers contact info, if they are looking for new jobs to work on? I can give you my contact info if it's a possibility. If not, no worries I completely understand keeping the sources private.

And that's awesome, when do you expect to get the app on the market or is it up already? I'll definitely check it out. It's always good making new connections.

 

[AustinS28]

I know the struggle with hiring someone overseas. I had work done for a previous unrelated project and hired someone in India. Communicating was very difficult, timing and also their lack of English made it even more of a struggle. Although it is cheaper, I would not want to go through that hassle again, and the quality was another issue, but couldn't argue cause of the price I guess. That's why from then on I do try to work with people in the US as much as I can.

I did check upwork for developers, that has been what I am leaning towards the most. I just wasn't sure how it would work if we need someone to constantly maintain the back-end of the app, if something crashes or updates need to be made. It's good to hear that you were trying that too, being the most feasible I guess that's what I'll look into and ask the developers from there.
If you actually wouldn't mind, would you be willing to share the software developers contact info, if they are looking for new jobs to work on? I can give you my contact info if it's a possibility. If not, no worries I completely understand keeping the sources private.

And that's awesome, when do you expect to get the app on the market or is it up already? I'll definitely check it out. It's always good making new connections.

Hey man, I'll happily ask him when my project is completed if he is looking to take on more work, but with his full time job and limited hours I don't think he has time for another project currently.

It'll be a few months before I am ready to release the MVP. I still need to find a designer to actually do the design work for the website. He's a master at creating the technology to make the program do all the great things I'd like it to do, but admittedly he is not a graphic designer so that's the next step, but less important for the MVP. Anyways I'll surely share it when it's ready.

You may be able to go to a meet up and scout for a developer there. They also have start-up weekends another dev friend suggested to me which was a thought I had until I found my guy. Supposedly they pair tech people with idea people and try to get something going at these events.

 

[kshy]

Hey man, I'll happily ask him when my project is completed if he is looking to take on more work, but with his full time job and limited hours I don't think he has time for another project currently.

It'll be a few months before I am ready to release the MVP. I still need to find a designer to actually do the design work for the website. He's a master at creating the technology to make the program do all the great things I'd like it to do, but admittedly he is not a graphic designer so that's the next step, but less important for the MVP. Anyways I'll surely share it when it's ready.

You may be able to go to a meet up and scout for a developer there. They also have start-up weekends another dev friend suggested to me which was a thought I had until I found my guy. Supposedly they pair tech people with idea people and try to get something going at these events.

That would be a great idea actually. Would you be able to know where I could find out more info about the events? It would be better to be able to talk to the developer face to face rather than over the internet. And thanks for the help up to now, really appreciate it.

 

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