What Are Investors Looking For In Your Prototype?

What Are Investors Looking For In Your Prototype?

At some stage, most entrepreneurs have been in the position of trying to get their idea off the ground but not having the capital to achieve it, this is where financial assistance from a solid investor can help give a start-up the momentum it needs to succeed. If you havent pitched for investment before, it can be hard to know what will be key to your presentation. So, what are investors looking for in your prototype?

According to a report by TechCrunch – Mobile apps are 3rd in the most profitable startups!

When it comes to mobile app development, the ability to present a prototype has never been easier, mobile app prototypes give us the opportunity to showcase how an application will work without actually developing any software or implementing any code.  If you are looking to raise investment, a prototype is a stepping stone to creating a first class MVP 

So what are investors looking for in your prototype? – Proof of concept

Investors want to know why they should put their money into your business and a prototype demonstrates that an idea can be turned into a reality, this is proof of concept. 

People’s perception of a product changes once they have it in their hands so a fully clickable prototype of the app will validate that the idea/product is worthy of taking to the development stage. 

Proof of concept doesn’t mean that the app is market ready however, it just means that the idea has merit and the functionality can be worked on and improved.

What Are Investors Looking For In Your Prototype

So what are investors looking for in your prototype? – UI/UX Design 

The UI/UX design is one of the most important parts of any mobile app, a good design means that the user has a good experience and so it plays a key role in ensuring the app’s success.

In simple terms the UI is the User Interface & this is where the users of the application interact with it – the user interface incorporates logo, branding, colours. The UI needs to be appealing to the user to encourage them to download the application from the store.

The UX is the User Experience and is designed with the user in mind and how they will experience using the app on a day to day basis. The main purpose of UX is to enhance the experience and ease of use. UX focuses on the functionality and accessibility of the app

The Apple Store & Play Store are highly competitive places with many companies now choosing to automate their business, so developing an app with an engaging UI/UX is at the heart of its success.

Market size and opportunity

42% of startup businesses fail because there’s no market need for their services or products, so validating the idea is crucial, researching the market size and potential for growth is key. 

If there is a demand for a product and a little healthy competition this will go a long way towards securing investment. 

Each individual investor will have their own appetite for risk, however if you have already demonstrated your proof of concept, conducted market research and created a functional prototype. You have shown that you are past the idea stage and ready to move forward with a product that has the potential for growth 

It’s a good idea to remember that not all industries are thriving, particularly with the ongoing effects of the pandemic. Launching into a thriving industry with maximum potential for success and sustainability is the best route forward – Does your app have longevity? 

What Are Investors Looking For In Your Prototype

Your commitment

You may have already funded the initial stages of your app build however you will incur additional costs and need further funding for your marketing and product launch. There are also the certain ongoing costs of maintenance and updates for any software development. 

Creating a prototype with your own funds will show a huge level of commitment and if you can bootstrap your way to this point you will instill confidence in investors and show that you are willing to take some level of risk to get your idea off the ground.

Be mindful however, that the earlier you look to gain funding the higher the chance that investors will want to take a larger percentage of equity in your business.

Gaining investment for your app doesn’t have to happen all at once; there are several rounds of funding which are called seed finding, series A funding and Series B & C funding. There is also Early Stage funding, which is intended for considered specifically for companies moving into the development phase. This round of funding is generally larger in value than the seed stage as new businesses tend to need more operating funds once they have a viable product. 

Final thoughts

Prototypes build an understanding of how an app will look and feel and most importantly function. A well designed prototype coupled with a well rehearsed pitch and a clear understanding of the business a prototype could be the key to securing investment.

Reach out to us at Media Shark if you are looking to create a prototype with the aim of gaining investment 🙂