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How to Get Your App Funded Using Crowdfunding
Updated: March 25, 2016 (A lot has changed since this post was first published, read on…)
If you’ve launched an app before, you probably know how hard it can be to put many hours into development and promotion without making any money out of it.
…or not enough to justify the amount of work you put in.
When comes your next great app 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.
One of the platforms mentioned in this post will also give you the ability to get feedback and gauge early interest in your app.
Why Use Crowd Funding for App Funding?
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 the money to make your app or its promotion better, without taking too many risks.
Posting your app on one of the crowdfunding 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 enthusiastic 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 Can Lead to 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.
That is why building your personal online presence is so important. It can help you launch current, or future projects.
Of course, it will help to have a few solid apps in your resume. But it doesn’t mean that you can’t make it without one, 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.
You can go directly to a specific review by clicking one of the links below:
If this list helps you, feel free to share it…[tweet_box design=”box_01″]This list of crowdfunding sites can help you get funding for your app. [/tweet_box]
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. Advice ranges from correctly defining your project, coming up with great rewards or making your video pitch to advice 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. You have to be in the US to start a campaign.
- Our Interview with Raul, The Walker App
- A Strategy for Kickstarter Rewards (Gamasutra)
- How Camouflaj saved République’s Kickstarter (Gamasutra)
- Your Kickstarter project got funded… Now what? (Gamasutra)
- Hacking Kickstarter: How to Raise $100,000 in 10 Days (Tim Ferriss’ Blog)
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.
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 that all-or-nothing funding is probably better.
- Who Gives a Crap campaign on Indiegogo
- Essential tips for a successful Indiegogo campaign (Part 1)
- Essential tips for a successful Indiegogo campaign (Part 2)
CrowdFunder is a UK company that gives you a lot of flexibility when it comes to funding your app project. It offers the most popular funding methods, all on the same platform:
- Community Shares
Like the previous platforms, you can raise some serious dollars…or pounds. Many projects are in the £30,000 range and up. But there are also some sub-£2,000 projects too.
So regardless of how big or small you want to go, this platform might be just what you need.
Tips: Their blog does a great job of featuring success stories. Read them and learn what it takes to run a successful campaign. You can live outside the UK and still run a campaign.
Platforms: iPhone App Store and Google Play
Update: Since this post was first written, the number of listings and successful campaigns on AppsFunder has declined significantly. We have chosen to keep the following information available for reference. While the site is still online, it no longer looks like a feasible way to get funding for your app.
AppsFunder was started in 2012 and they “connect mobile entrepreneurs and developers with funders.”
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.
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.
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.
We have noticed that app-specific crowdfunding platforms have struggled mightily and you are going to be much better off on a more general funding platform like Kickstarter.
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 look into right now!
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.
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