How To Get Your App Funded Using Crowdfunding

If you’ve launched an app before, you probably know how hard it can be to put many hours into development and promotion without necessarily making any money out of it. Or not enough. When comes your next great idea, you might hesitate in putting all the sweat and tears again. If you believe in your app’s potential but still want to lower the risks, getting it funded can be a great way to reduce the risks. And using one of the platforms mentioned in this post will also give you the possibility of getting early feedback and gauging and generating interest around your app.

Why using crowdfunding for your app

When I talk about getting funding for your app, it doesn’t mean that you have to be looking for all the money you think you need to develop and promote it. You might want to get funds for a particular part of your app development, or a specific feature. Your app might also be already available on a mobile app store, and you might just be looking for money to localize it or promote it (or money that gives you the time to do so). The basic idea is: you could use money to make your app or its promotion better, without taking too many risks.

Posting your app on one of the crowd funding platforms mentioned below is also a great way to gauge interest for your project and get feedback early on. Remember when I told you to create your app website early and engage users as soon as possible? Well, this allows you to do just that. Pitch your project the best way possible on one of these platforms and if you get zero funding, that means you probably have to rethink it. If people are enthusiastics and back your app, you’re probably on to something! You’ll also be able to get their opinion as you go forward, which hopefully will allow you to go in the right direction. And when you launch, they’ll be ambassadors of your application and will talk about it!

A great network for a great campaign

They talk about it on pretty much all the crowd funding platforms: if you have a great network of people or a community of users you can reach out to, your campaign has more chances to be successful. It will of course help to have a few solid apps in your resume. Doesn’t mean that it’s enough or that you can’t make it without, but it will sure help to kick-start your campaign.

Like in life, hustling helps a lot too. If you don’t have the network, create it!

Crowd funding platforms for your app

Note: Although I haven’t had a chance (yet!) to post an app campaign on the following sites, I took a pretty serious look at them to save you some time in deciding which one should work best for you. And because I believe it’s always good to get real insights, I either including a link to someone sharing their experience or interviewed one. If you’d like to share your experience, leave a comment or contact us (contact[at]apptamin.com).

You can go directly to a specific review by clicking one of the links below:
Kickstarter
| Indiegogo | AppBackr | AppsFunder | AppStori

KickStarter – Funding Platform For Creative Projects (US residents only for campaign creation)

App-specific?: No
Platforms:
Any

In their own words, “Kickstarter is a new way to fund creative projects”. That’s a good thing, since if you want your app to succeed nowadays you definitely need something creative or a unique approach. Kickstarter can be used to raise a small amount of funding, and therefore perfect for an app.

It’s an all-or-nothing funding platform: you set a goal to reach, corresponding to the amount of money you need to complete the project, and if it is reached then you get the money. Kickstarter applies a 5% fee and Amazon will apply credit card processing fees of about 3-5%.

On Kickstarter, crowd funders don’t get any ownership of your work nor direct money from you. Why would they back you up then? Rewards and Stories. The rewards you choose to offer in order to get funding have to be “smart, fun an tangible” and can be products, benefits or even experiences. Along with your pitch, rewards are the key point to get funded on Kickstarter.

Kickstarter wants you to succeed and present the best project possible, so they’re giving you tips and guide lines on their Kickstarter school page. Advices range from defining correctly your project, coming up with great rewards or making your video pitch to advices on promoting your project.

Projects on Kickstarter are not app-specific. That means that you might get more eyeballs, but also that your app idea might be lost in tons of other projects.

Tips (from Raul Rea, The Walker App): The video is really important, post updates often, read the Kickstarter guidelines

Links: 

Indiegogo – Go Fund Yourself

App-specific?: No
Platforms: 
Any

Indiegogo is pretty similar to Kickstarter, with the exception that you can choose your funding type:

  • Flexible Funding: you keep the funds you raise by a certain date, even if you don’t reach your goal.
  • Fixed Funding (all-or-nothing): contributions are refunded if you don’t meet your goal.
Indiegogo pricing

Pricing & Fees on Indiegogo

A lot of the mobile app-related projects seem to be using the flexible funding type. Unfortunately (and maybe because that type of funding is less engaging and creates less buzz) it looks like only a few mobile applications raise a good share of their funding goal.

Just like on Kickstarter, you keep 100% ownership of your project. You create several “perks” to motivate people to contribute.

They’ve done a pretty good job in guiding you during the project creation, with several tips and guidelines along the way.  They also made sharing a campaign pretty easy for visitors. Creating a good pitch, a great video to support it and creative perks will help you succeed.

Mobile apps are not the majority of projects on Indiegogo, and getting funded doesn’t look easy. But maybe it’s because the overall presentation and the perks are not engaging enough. Check out the story below to see an awesome example of a successful campaign.

Tips: Come up with really creative perks. I also think the all-or-nothing funding is probably better.

Links: 

AppBackr – App Wholesale Marketplace for App Developers

App-specific?: Yes
Platforms: iPhone App Store and Google Play

AppBackr, despite being often called ‘Kickstarter for apps’, is a really different platform. It can allow you to get backing (financing) for both apps in development or currently for sale in a mobile app store.

When posting an app for appbackr, you enter your app details including title, marketplace, description what the money will be used for, and why they should back your app. You set a reserve goal, which is the number of copies that must be sold before backr purchases are completed and before you receive money. To define it, you need to know what is the minimum dollar amount you need to raise (which corresponds to the “what is the money for” section). If you don’t reach this reserve goal, no money exchange hands.

Backrs that believe in your app’s potential purchase wholesale copies of your application on AppBackr. Once the reserve goal is reached you get the funds immediately on your PayPal account, which allows you to get paid while developing or promoting your app. When your app starts selling, you get paid and you pay both appbackr and your backrs.

Update 10/25/15: Appbackr introduces “Pre-realease” campaigns, for apps that are 30 days from launching in retail app stores. There is no reserve goal, and if the app has not launched 60 days after the launch date then backrs are refunded. If you develop iOS apps, you may receive the funds as soon as your app is approved by Apple.

Since the idea for backrs is to make profit and not only to see your great app being published or being a success, you pay them more than they initially did because they bought copies at a wholesale price to begin with. There are two ways of distributing the money, which you can find here.

You’re probably wondering how much it is going to cost you…That depends on two things: the price of your app and its stage (if it is already live or not on a mobile app store). Backing an app that is still in development has a potential profit of 54% and a finished app has a potential profit of 26% for backrs. So you’ll pay back less money if your app is already finished when you create your appbackr campaign.

When all the copies purchased by backrs have been paid back (at the initial price + the profit they are entitled to), all future sales revenues are for you (well, and for Apple or Google…).

Below are the economics for a live app, priced at $0.99. You can find about the full appbackr Distribution Economics here.

Economics appBackr

If you want to get backing for both an iOS and Android app, you’ll need to create 2 different campaigns. Just like for a Kickstarter campaign, having a good network and an existing users’ community will help you succeed. Your app can also get featured by AppBackr on their feature page, giving you additional exposure.

Tips (from Brad Mills, Lightspeed Getaway): Put 4 or 5 nice screenshots from your app/game, write good copy, start doing video updates once you get some backing

Links: 

AppsFunder

App-specific?: Yes
Platforms: iPhone App Store and Google Play

AppsFunder was created in 2012 and its concept is closer from AppBackr’s, with a few differences.

When submitting your app you set 2 milestones (and more later?), and define the funding needed for each. This allows, in my opinion, to clearly state what the money will be used for, motivate funders and can allow you to keep going forward with your app. You then have to pick which funding options you want to offer: in all cases Funders have to be able to get the app first when funding the app (between $1 to$5), and you can also choose one or several amounts that supporters will get back from app revenues.

Funding options

Funding options on Appsfunder

It’s an all-or-nothing funding, so if the target amount for your milestone is not reached within the time set you don’t get the money. When it is reached, you get 80% of the milestone amount on your paypal account. The remaining 20% is paid out when the app is launched on the mobile app store. For both payments AppsFunder takes an 8% success fee.

An interesting feature allows you to ask one of the selected experts to review your app project. If the expert likes it, your project will be “AAA” (AppsFunder App Authorities) certified which will give it additional credibility and therefore potentially more Funders. It’s also a good way to get feedback on your app.

As on AppStori (see below) projects owners can post updates about their apps, people can comment (unfortunately there seems to be some spamming but they are working on it), and you can see the list of Funders. AppsFunder also seems to give you more liberty in showcasing and pitching your app, which can be used to your advantage if you do things right (some apps’ pages don’t look so great).

Tips: Use the freedom they give you to create a great-looking page for your app, and post news about your project and its milestones.

Links:

AppStori (US residents only for campaign creation)

App-specific?: Yes
Platforms: iPhone App Store and Google Play

AppStori can be more accurately described as a “Kickstarter for apps”: you define your funding goal and ask people to contribute in exchange for benefits (like the rewards on Kickstarter). Once again, it’s all-or-nothing funding: if the project doesn’t reach its goal, it will not be funded and funding can’t exceed the goal.

One pretty cool thing is you can get pre-qualified by the AppStori team: this ensures you that your project is right for the AppStori community before you put too much effort into your campaign. Once it is pre-qualified, you’ll create the video and pitch for your project, tell people about your team and create the benefits you’ll give to contributors. After approval of you’re campaign, you decide when to publish it and start generating buzz around it.

AppStori Process

AppStori Process: Pre-Qualify your app project for the platform

Money-wise: AppStori will deduct 7% of the total collected funds, and Amazon Payments will deduct ~ 2 -3% for the credit card processing.

I like the fact that AppStori lets you have a blog where you can post different kind of updates and content, as well as a comments section to get feedback and interact with visitors and a contributors section where you can see who’s contributed to the app so far.

AppStori is a few months old, and your app won’t be lost in hundreds of others. Their inventory should be growing in the coming months. The platform also allows for users (worldwide) to apply to be a beta tester for apps that they like (and provides a mechanism for developers to categorize and screen potential testers)

Tips (from Matt Hudson, Trivi.al): Spend time crafting your story (show what’s unique), create a video.

Links: 

Here you are, an overview of some of the existing platforms (you can find some more here – but they seem less relevant to apps, and some other good tips here) where you can get funding for your app. You can now choose the one that seems to be the better fit for your project. Remember it’s not only about funding though, as it’s a great way to gauge interest in your app and get feedback early on. So it’s definitely something to consider!

You want to share your experience on getting funds for your app via a crowd funding platform? We’d love to hear it! Leave us a comment or contact us.

9 June,2014
12 comments
Alex Martin
Alex Martin

Most of the apps on here seem to have very small funding goals -  around $2000. The research I've done shows that it costs $8000-20,000 for a baseline app. Why is there such a discrepancy? Can someone actually expect to be backed 20K?

dariakore
dariakore

Indeed a great post but seems like it needs an update while SellanApp.com platform is growing and making more and more app ideas happen through crowdfunding.

ThePostalnator
ThePostalnator

Thanks for this article, I didn't know about AppsBackr and AppsFunder. I was starting to think that apps don't get funded with crowdfunding, where as people go bananas for any hardware gizmo! 

We're in the final days of funding our app on Indiegogo, but you're right, it's better for apps with an established following already. However, we've used the campaign to create a following and awareness of the app, so there are some positives out of this.

http://www.indiegogo.com/projects/fitfriend-a-sportswatch-app-for-runners


appsplit
appsplit

Great article.  Don't forget to also include Appsplit which was the first site to launch in the app crowdfunding and marketplace space.

Greg
Greg

Several of the developers I am currently assisting with acquisitions have used Appbackr in the past. There are definitely varying use cases, but for Apps that have a low risk of clearing the number of sales pre-sold, it is expensive money. For an established and highly successful app, I have seen an effective funding cost of 15-25%. At the end of the day it all depends how you are going to use the money. If it is going to speed up development on a promising new app or fund needed marketing efforts for a current property, your ROI may significantly exceed the cost of what is essentially a bridge loan. It is incredibly important to run the numbers ahead of time and know what you are going to do with the money.

Brad Mills
Brad Mills

Great article, I'm going to check out the interviews and consider using Appstori or AppFunder to see what the difference is between them and AppBackr.

apptamin
apptamin moderator

@Alex Martin  That's a good point Alex. Only a handful of campaign (like the 1SE one) can get that much backing. Developers shouldn't see those platforms as something that will finance their whole app, but maybe just part of it (as well as the exposure): getting enough to get a prototype going, or to go from prototype to v0, or to get $2k in marketing budget, etc. 

apptamin
apptamin moderator

@dariakore True, there are lots of new players: SellanApp, Applits, AppVillage, LaunchSky, Dandy, etc. Post needs an update indeed.

P-S: It's good to note you're part of the sellanapp team when commenting.

Sylvain Gauchet
Sylvain Gauchet

Well Brad, you know we'll be happy to hear your thoughts on how it goes. Any relevant info/tips you find, feel free to share them ;)

dariakore
dariakore

Thanks for the answer! Yes, you are right, I will note that I am a part of the sellanapp team in the future.

As for the other new players you have mentioned above, while all of them help to grow an app idea into an actual app, most of them do not use specifically crowdfunding for that.

gpiero
gpiero

@Sylvain Gauchet May want to take a look at SellanApp.com too. I've recently had an app crowdfunded here - great platform...

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Sylvain

Hi there, I'm Sylvain and I've been working for several years on marketing mobile apps. With Apptamin we believe that we can help developers better promote their apps by creating cool app videos and sharing what we've learned...While learning some more !
I'm French and English is not my primary language, so you're welcome to correct me if I make a mistake.


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