Why Your App is Not Getting Funded?


You have the greatest idea for this new killer app. All you need is somebody who can develop it and some funding to market it. Maybe you talked to a few people to get funding. But it is harder than you thought it was going to be. If this sounds familiar, you are not alone. Here are some reasons why your app is not getting funded, as well as some ways in which you might be able to change your idea or your approach is able to find funding.

Your Idea Is Too Small

If you have an idea that is totally unique, it could be that the market is too small. This is likely the case if your idea is very specific or solves a very specific problem.

App Funding

Investors invest in ideas that are meaningful to them, but they also invest in ideas that will make money. For an idea to make money, it needs to have a market large enough to make money.

If your idea is too specific it doesn’t mean that it isn’t a good idea. It might just mean that investors are afraid that your market won’t be big enough to repay their investment.

That doesn’t mean that your idea is dead. Try looking for ways to make your idea applicable to more people. Alternatively, try looking for smaller-scale investors. Smaller investments mean that your app can pay off while making less money. That, in turn, means that it can have a smaller market.

You Do Not Have An Unfair Advantage

If you’ve been hearing the term “unfair advantage,” it doesn’t mean that you have to lie, cheat, and steal to get your app funded. It just means that maybe your potential investors don’t see you as the best person to make your app.

If you want funding for your app, consider expanding your resources. Maybe you aren’t the best person to bring your app to market. That doesn’t mean that you can’t become the best person. Consider talking to local community foundations, chambers of commerce, and business incubators to find out what resources might be available to you.

Want to create a custom pitch deck for your startup using AI? Try MyPitchDeck!

Your Team Is Weak

When your investors invest – or don’t — they aren’t just betting on your idea; they’re betting on your team. Your idea can be great but if you don’t have the right team to put it together, finding funding will be hard.

If your team isn’t impressing investors, it doesn’t mean that you need to get rid of them. Instead, look for team members or cofounders that can add to the expertise and skills of your current team.

If you don’t have a team, you’ll likely need to put one together to attract funders.

No Traction

Gaining traction can be something of a Catch-22. You have an idea for a product or service, but it needs funding. Some investors might not be interested without knowing that it will move. How do you prove that it will move if it doesn’t exist yet?

Consider telling your potential investors about the success of services that approach solving your problem. Then make them understand that your proposed solution will take at least a share from these markets. Illustrating a need is an important part of promoting your solution.

Early user-testing with prototypes or minimum viable product (MVP) can also be significant. If you can prove that people want to see your idea in action, that might win over potential investors even if you don’t yet have a working model.  It is very unlikely to find a professional investor for pre-product, especially if you are an unproven team.

The initial investment for developing an MVP or even a complete mobile app is low to warrant an external investment. Normally external investment is earmarked for customer acquisition and expanding the tech team. If you have finished  MVP development or the app, look for app developers for equity.

You’re Not Sure How to Get Customers

Getting customers is harder than it sounds for a new startup. Don’t assume your customers will find you once you create a great app. If you want to attract investors, you’ll need to be able to explain your marketing plan. Dropping vague ideas like “SEO” and “Social Media” probably won’t be enough.

Every business that anyone is talking about is using SEO and Social Media. If you have an experienced SEO team working on your content, that’s one thing. If you have a plan on how you will target your ads to get the most out of social media, that’s different. But you have to have a plan.

You’re Working Part-Time

Investors are serious. If they’re going to fund you, they need to know that you’re serious too. It’s hard to look like you’re serious about something if you’re only doing it part-time.

You might not be able to quit your job right now, and that’s fine. Maybe it just means that you’re not ready to be looking for serious investors yet. Consider ironing out some more things and looking for big money when you can afford to give your idea your full attention.

Alternatively, try to get some full-time co-founders and full-time members of your e-board. They can handle the day-to-day and add legitimacy to your project while you keep working with other things.

Whatever you do, don’t give your investors a business card with your employer’s logo on it.

You Don’t Understand Your Competition

Another reason that you might not be finding funds for your app is that you might not understand your competition. The app market is huge. If your app is going to succeed, you need to know exactly where your app fits into that space.

Before you begin looking for funders, be sure that you understand what similar solutions may already exist. It can help to know what companies produce them and how much they cost.

Your Product Need Isn’t Validated

It could be that you see a need for your app. Maybe you know some people who agree with you. That’s not the same as seeing a marketable need. For your app to make money, it has to have a large enough market to pay for itself.

Just like you need to research potential competitors, you need to research the size of your potential market before you begin looking for funding.

Your Financial Projections Are Unrealistic

Finally, your potential investors may simply not believe that your app is profitable. It could be that they are right. Once again, it can be hard to separate your passion from the cold facts of existing in a market.

What to Do Next?

Investors want to invest. They’re not out to criticize your idea, but they need to believe in it. That means that you need to do your homework and put in some real work on your own before even looking for investors. How do you know if your startup idea is worth pursuing? Now you got the idea of why your app is not getting funded.

If you can’t find investors, that doesn’t mean your idea has no hope. You can always consider taking out small business loans or looking into crowd-funding.

find cofounder

Are you looking for a technical co-founder/Investor for starting or running your startup? We can help.

Apply to Codeventures today!

Apply Now

Leave a comment

Your email address will not be published. Required fields are marked *