So, you have an amazing idea for a smartphone app. However, most entrepreneurs fail to realize that a great idea is only the beginning, not the end of a job. As competition in the market increases, there is a dire need to prove the relevancy of your idea in order to raise funds. Still, raising capital for funding your app is quite possible. All you need to do is to research the options available to you and find the one that suits your app idea the most. In this article, we will cover the four basic ways of fundraising for smartphone apps.

Venture Capital – VC corporations

Venture capital firms are a route for many major players in the startup world, particularly for those looking to scale big time. Just think about Uber, Facebook, Airbnb, LinkedIn, etc. However, this path isn’t a short one. You will need an amazing A-game pitch and be ready to have your idea molded into how the VC company views the quickest route to success and a monetary return on their investment in you and your app idea. 

While this can be the fastest route to your big time, not everyone receives funding and, even if you do, there is still no guarantee of success. Still, this is a great start if you can find VC at an early stage and are willing to ride this wave. Just remember that, if you don't start with VC, that doesn't mean you can't find it later. In most cases, it may be for the best to get your idea off the ground by bootstrapping and then going for VC at a later date.

Unsecured business loans

When you're trying to fund your application, you may have looked into small business loans as a source of financing. Small business loans are often used for funding a business idea, expanding a business, or for purchasing inventory or supplies. However, many lenders require small business owners some sort of collateral for that loan. Collaterals can include real estate, equipment, an auto title, savings or other assets.

Online unsecured business loans can be an alternative to this as they don't require collateral or well-established credit ratings. An unsecured loan can provide the necessary financing for an individual trying to fund their application. These loans typically range from $5,000 to $100,000, require minimal documentation, have a high approval rate, and are approved within a 24-hour time period. 

Find a co-founder with funds

A business partner or a silent partner can be a great way to get funding for your app. You will need to find the perfect co-founder to shoulder the responsibility of launching a new app. Ensure you do your research on potential partners and make sure they are legitimate. Any baggage they bring with them could spell disaster for your business.

You can also pick your co-founder based on your needs. A tech-savvy business partner can help you design and build a prototype of your app from scratch without spending a dollar on outside developers. In the end, it all comes down to positioning yourself in a way that shows your potential investors that the project must be completed, that you will do this and that you need an x-amount of money to get it done.

Start a crowdfunding campaign

Crowdfunding represents an attractive funding avenue for app startups that have absolutely no resources whatsoever to get their idea developed. Even though hundreds of startup and application ideas get neglected and unfunded on crowdfunding websites, the right pitch can promise a bonanza for your dream app. In return for a service fee from the crowdfunding website and a transaction fee from the payment processor, you can be assured that sufficient funding is there to get your dream going.

Crowdfunding has numerous models that you can choose from. The leader in this space, Kickstarter, is all-or-nothing platform. In other words, once you set your funding goal, you better reach the target amount to get the money. Falling short of your target leads to refunding of contributions to every individual investor. On the other hand, Indiegogo allows both flexible funding and fixed funding options, meaning that, if you fail to reach your target amount, you get to keep your collection in return for a higher service fee.

The second reason for startup failure is running out of money. Securing the right kind of financing can protect you from this. Whatever funding you choose, remember to research it properly so that you can understand its pros and cons and avoid any of its pitfalls.