Key Points:

  • Crowdfunding an app is a great way to bankroll your mobile app development and navigate other hurdles that come with the promotion process
  • You also need a strong presence online and on social media to create a great network or a community of users you can reach out to for your crowdfunding campaign
  • IndieGoGo is a popular crowdfunding platform that has supported over 800,000 creative projects and boasts over 9 million active backers from over 235 countries and territories

App development and promotion require hard work, time, and funds. If you have a great app idea and are willing to put in the time and hard work to bring it to fruition, you should not allow a lack of funds to bury your idea.

Crowdfunding an app is a great way to bankroll your mobile app development and navigate other hurdles that come with the promotion process. Crowdfunding app sites help you raise the funds you need to spur your app development, get feedback from other creatives, and gauge the early interest and success of your app upfront.

But before you launch your campaign, you may need an expert's advice on how to carry out a crowdfunding app campaign. Easyship has a wealth of experience on crowdfunding and can help you figure out your campaign costs upfront so that you can set realistic crowdfunding goals and build a successful campaign.

In this article, we'll look at how crowdfunding app campaigns are different from other projects, how to crowdfund an app and the best crowdfunding app sites you can use to fund your project. Let us dive right in!

Table of Contents

Why Crowdfunding an App is Different from Any Other Campaign

Before you begin your campaign, you need to understand that crowdfunding an app is different from other product campaigns. Here are the major challenges you may confront.

  • People expect apps to be free or inexpensive: consumers do not expect mobile apps to be expensive. The expectation is that mobile apps should either be free or cost only a few dollars. This presents a challenge when thinking of the kind of rewards to offer to your backers. You will also have to price your app cheaper than what it will eventually cost in the app store, meaning you will need many backers to reach your funding goal.

For example, let’s say you need $24,000 to build an app that will cost $3 in the app store. When crowdfunding an app, it is recommended you offer a 50% discount on its retail price. That means you will deliver it at $1.5 to your backers. You will need 16,000 backers! Only a few projects get anywhere near that.

  • People may not be willing to wait: you will have to convince people to wait for your app when they can instantly buy other apps or get them for free from the app store. Your app is still unproven, and you will have to deal with development issues and bags. Building apps is also hard. There is the risk that your app may never come to life within the estimated development and shipping timelines, or in the worst-case scenario, it may never come at all. This presents a fulfillment risk, and you will need to have attractive discounts and back rewards to raise money.

Crowdfunding an app has its advantages too, and if your app has potential, you should not step back carrying out your campaign. There are various reasons why you might want to crowdfund apps.

  • Raise funds: You may be seeking to raise funds for a particular part or a specific feature of your app development or promote your app that is already available in the mobile app store. Whatever your reason is, a crowdfunding app will allow you to take your idea or application and make it better with less risk.
  • Get feedback and gauge early success: Crowdfunding an app will measure your idea's success. If you don't raise any money, you can work hard to make some changes and make it better, but if the crowd receives your idea with enthusiasm and you have money coming in, you can move on with confidence. Posting what you have made so far on a crowdfunding site will also allow you to get feedback from early adopters of your application and make changes early on.
  • Marketing and exposure: Your campaign will also help expose your app to a reliable network of supporters who will play an advertising role through word-of-mouth in their networks.

The type of campaigns you carry will significantly impact your app's success. Along with your compelling pitch story that talks about the benefits and the experiences your app brings to its users, you need exciting rewards that will make people want to fund you.

You also need a strong presence online and on social media to create a great network or a community of users you can reach out to. This will give your crowdfunding app campaign more chances of success.

Here are the different campaign types you can do in various crowdfunding app sites.

  • All-or-nothing: you don’t get any money if you don’t reach your goal within the set timeframe. Appbackr, AppStore, and AppsFunder use this type of campaign.
  • Sell: This campaign type allows you to sell your app or equity stake in your company. You can use it with AppSplit.
  • Open funding: you can keep whatever money you raised with this campaign type. You can use this campaign type with SellanApp.
  • Contest: people pitch their ideas monthly. An app developing firm chooses the winning idea for development. You can use this campaign type with AppLits.

How to Crowdfund an App

To carry out a successful crowdfunding app campaign, you need to be aware of the costs you are up to as well as the steps you should take to accomplish it. If your app will cost $2 when it goes live on the app store, asking someone to donate more than that is hard.

Think of asking someone to contribute $100 for an app that will cost $2! The problem is, if your backers give only $2 or $1, it is going to be challenging to achieve your goal; the cost of developing an app can be anywhere between $20k-$30k. So what can you do then?

The key to carrying out a successful crowdfunding app campaign lies in being creative and coming up with ideas to increase your average contribution per backer. The app itself has to be the first and lowest priced reward level offered at a 50% discount on its retail price in the mobile app store.

To increase your contribution per backer, you need to provide more valuable perks beyond the app itself as compensation to your backers for the fulfillment risk they are taking on. You also need to make sure that your rewards' cost doesn't exceed the lowest price point at which your app is offered; otherwise, you will spend a lot of funds fulfilling your backer rewards; this can spell doom to the whole development process.

How Much Does it Cost to Crowdfund an App?

You need to be aware of the different charges that apply to your campaign and set realistic goals with the costs built into your funding goal upfront. Here are the costs you need to think of.

  • App development costs: this is where the huge chunk of your funds will go. This is the money you need to pay your creative team to develop your app's different features.
  • Platform fees: different platforms charge a certain percentage of the money raised as a fee. AppStori takes a cut of 7% of the funds raised plus Amazon’s 2-3% for credit card processing. AppFunder takes 8%.
  • Fulfillment costs: this is the money you will spend sending rewards to your backers
  • Advertising costs: you will need money to create a video, create compelling graphics, and promote your crowdfunding app campaign online on different channels.

A Step-by-Step Guide to Crowdfunding Mobile Apps

Here is a step-by-step guide that will help you make your crowdfunding app campaign successful.

  1. Keep in mind that people expect mobile apps to be either free or inexpensive.
  2. Because of the fulfillment risk your backers are taking on, keep the price of your app cheaper; offer it at a 50% discount on its app store price.
  3. Offer your app as the first and lowest priced reward level; then come up with creative ways to increase your average contribution per backer.
  4. Create other relevant and valuable perks that you can package at higher reward levels with your app. Make sure to keep each reward level below the lowest price point for your app.
  5. To keep fulfillment easier and decrease shipping costs, consider offering digital perks at higher reward levels such as e-books, user guides e.t.c

The Best Crowdfunding Sites to Fund a Mobile App

Different crowdfunding sites for apps offer various benefits, and you need to be able to choose the one that is right for you. Here are five of the best crowdfunding sites for funding mobile apps.

  • Kickstarter

Kickstarter is the most popular crowdfunding platform and has helped fund a total of 445,000 projects that attracted pledges from 17.2 million backers to raise more than $4.6 billion. It uses an all or nothing model, so you won’t receive your fund unless you meet the funding goal.

If you do meet your goal, they take 5% of the funds raised as a fee for using the platform, with an additional 3%-5% payment processing fee. Any entrepreneur with an idea can create a project, but it must first meet Kickstarter’s guidelines before it’s approved before going live.

Campaigns run up to 60 days, and creators should expect to invest significant time into promoting their project.

  • IndieGoGo

IndieGoGo is a popular crowdfunding platform that has supported over 800,000 creative projects and boasts over 9 million active backers from over 235 countries and territories. Creators can choose all-or-nothing or keep-it-all funding options, which gives them broader flexibility for their campaigns. There is no pre-screening before a campaign goes live.

They charge a 5% platform fee and there’s an additional processing fee that varies by country, however there is no charge for non-profit campaigns. Any type of campaigns are allowed with retail campaigns the most popular.

InDemand is a service they provide which allows campaigns to continue to raise funds indefinitely period of time after the initial funding.

  • AppStori

AppStori is an app-specific site for crowdfunding app ideas meant for the iPhone App Store and Google Play. It is open to US residents only. You don't get any money if you fail to reach your funding goal. You also can't get more funds than you have asked for.

Your project will be subjected to a pre-qualification process by qualified AppStori experts. If you get a go-ahead, then you start to create the advertising for your app.

You can post your app developments and get customers' feedback about your app so that you can make changes that they want to see. Since AppStori is still a newer and smaller app crowdfunding site, you stand a better chance to have your idea noticed. They charge a platform fee of 7% plus Amazon’s 2-3% payment processing fee.

  • AppBackr

AppBackr is another app-specific crowdfunding platform that allows you to get funding for the development of a new app or already developed apps available to customers. It only supports the iPhone App Store and Google Play Apps.

To get funding on this site, all you need to do is explain the idea behind your app, your target marketplace, and why you should be funded. You then move on to set your app's funding goals and begin the process.

Your backers will then purchase your app's copies until you reach your goal, after which the money is delivered to your PayPal account. You then proceed to develop and promote your app right away.

If you don't reach your goal, you won't get any money. When your app gets into the market and starts to make money, you pay your backers more than they invested in your idea. You will only begin to get funds after your backers are paid their initial investment and any promised profits. AppBackr features a profit-sharing model.

  • AppsFunder

AppsFunder is also an app-specific crowdfunding site used only for Google Play and the iPhone App Store. With this crowdfunding site, you set two different milestones and timeframes, either during the setup or later. You also define how you will use backers' money to help them know what they are investing in.

AppsFunder gives you the leeway to continue developing your app while funds are being raised. You set amounts between $1 and $5, and backers who provide any of these will have immediate free access to your app, plus any other back rewards.

If you don't reach your funding goals within the set timeframe, all the money is refunded to the backers. When you reach your goal, 80% of the funds are delivered to your PayPal account. The rest of the money is released after your app goes live on the mobile app store.

With AppsFunder you benefit from having your app reviewed by app experts. This gives it an upper hand in getting support from potential backers. You can also post developments for the app and get feedback from customers. That means you can make changes and give your customers exactly what they want. AppsFunder chops 8% of the total funds raised as a fee for using the platform.

Create the World’s Next Addictive App Through Crowdfunding

Crowdfunding has helped bring many creative ideas to life. If you believe that your mobile app idea can create the world's next addictive app, you should not bury it because of a lack of funds.

Now that you know how to crowdfund an app, and some of the best crowdfunding sites for apps where you can pitch your idea and launch your campaign, why not hit the ground running and bring your big idea to fruition!

Easyship can help you set realistic fulfillment goals for your crowdfunding app so that when you are ready to ship your campaign rewards, it is quick and easy.

Create an Easyship account now and access multiple cost-effective shipping solutions and a range of automated rules.