In this article, Coffee IT discusses a number of different types of investments for a start-up app. Do you want to know in which phase your concept/app is? We are happy to help you.
Every start-up needs an investment at some stage. The ultimate goal of every investor However, an investment involves yielding more funds than was invested at the start of the investment, which is why it is important for the investor to know in which phase the company is and what its potential is (the business case). Are you willing to exchange shares for capital? Then there are three options: Angel investors, equity-based crowdfunding and venture capitalists.
But what is the difference between angel investment, equity-based crowdfunding and venture capital?
angel investing
individually- Individual investor
- Between €10.000 and €100.000 investments. Always less than 1 million euros
- Interested in early stage companies and startups
- Contacts and experience
- Often not actively involved in management
Equity crowdfunding
Group- A group of investors who invest together from a foundation;
- Investments between €50.000 and €500.000;
- Early stage companies and startups;
- Big network and experience
- Passive role in the organization
- More publicity and public.
What can I expect?
Whichever investment option you choose, there is a good chance that the potential investor will first discuss your plans in detail. Obviously, you will have to be able to explain what your concept or startup entails. But it is also important for the investor to know how much money you are asking for, what you are going to spend it on and when he can expect the amount/return. To guarantee the answers to these questions, you will also need to be able to explain when you expect to break even, how you will promote the product and especially why your product is unique compared to similar products.
Other supplies
Before you approach investors, it is important that you have a mock-up. A mock-up is a clickable version of the design without technical realization. A mock-up ensures that you can test your app without developing it and this saves money. Not only that, it also gives investors an idea of how far your concept has come.
It can also be useful to have a press kit. This is a package containing promotional material (video, screenshots, banners), a short description, a long description and a list of functionalities. The press kit is often used for media attention.
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