As an investor or wealth manager you may have been pitched an app startup idea. There are many ins and outs to this business and you can easily end up burning through cash unnecessarily. Professional investors will know what to watch out for. This app investing consultation service is mainly for smaller investors such as family members, friends, first-time investors, etc.
Even with the best pitches, there are angles that are not covered and typically there will be weaknesses to their business plan. With most of these app startups, they simply focus on getting the startup capital without considering profitability. The current situation is like high school popularity contest to acquire capital.
We can certainly spot red flags in startup business plans in addition to conducting an over all analysis before you invest in a startup. Here are some issues that are likely to come up during our analysis:
In order to visualize startup success and failure rates. We have put some statistics together for you here.
You can see this article by clicking the link above from 2016. For keeping things simple here are the most important stats that I can see from this article are: 1) 4% of startups made it to the second year, 2) 46% of the startup failures were do to incompetence (startups in 2011). As you can see here, often new startups go into their “idea" overly confident (the statistics are for all startups, not only app startups).
Most of what we are telling here may deter you from investing in a startup. But, there is some good news as well in that founders that previously failed at a startup have better success rate than first time founders. Founders of a previously successful startup succeed at their next startup 30% of the time. By contrast, a founder of a previously failed startup have a 20% chance of success with their next startup. Lastly, first-time entrepreneurs have an 18% success rate.
Lastly, it must be pointed out that iOS apps can have insane ROI (return on investment). In fact we have rarely lost money. We can help you obtain the same success rate. Here is the best ROI that we have had from PebbDrive (no longer in the AppStore). The second app below, Smart Measure, was an app made for a client of ours (https://apple.co/2GR7Ma8).
2. Smart Measure (2017): Smart Measure is a measuring app we made for a client that uses trigonometry and distance using the iPhone’s camera lens. The app can calculate distance, length, and width. Over the years we learned quite a lot about this business regarding organic growth, app icon design, keyword tricks, etc. We found this code on Chupamobile purchasing a license for $199. The app has made an average of approximately $1,500 per month and downloads have been going strong for about a year. Here are the ROI details:
As you can see investing in apps can be extremely lucrative. Dodge some serious headaches and get a head start in this business by using our App Investing Consultation Service.