3 Reasons I Invest In Apps

Many people don’t know that the way I started The App Guys was actually by first creating my own app. Before I started The App Guys my highest paid year in my job (I was a youth pastor) was $36,000 with no benefits. My wife and I were a single income family with two kids, and financially things were very difficult. Many of you have been there too, it’s not a fun situation.

So, I had an app idea that I thought was good and even important. Since I had no money at all I had to try and raise the funds, which I did with a minorly successful IndieGoGo campaign. We got enough funding to build a very reduced version of the original app concept, but through that process, I learned a lot about apps and decided it would be a great business to get into. And then The App Guys was born! Not long after I left my job and went full time into business.

It’s amazing how things work out, isn’t it?

So now, aside from building apps, we invest in apps too. As I’m typing this the reality of where we’ve come from and what I get to do now is really hitting me. What God has done for us and where He has brought us in business is breathtaking.

We hear some really awesome ideas. Some people are fully funded (app development is often $50,000+) and some are only partially funded. In some scenarios, we are able to partner with clients in a part cash/part equity deal. So yes, it will still be a fairly high cost even if we take equity (the first time we partner with someone we ask that at least the project costs are covered), but we are able to discount the development heavily, offer extra services and be available for general business consulting and strategy help. We aren’t always able to make a deal like that, and to be honest many clients prefer to keep all of the equity and just pay the cash price for development...which I totally understand. But investing in apps is something we do often.

All of that said, here are 3 reasons I love investing in apps:

1. Inexpensive to start. It can easily take hundreds-of-thousands of dollars to start a small restaurant, retail shop etc. Sometimes much more. And that doesn’t include marketing and keeping the lights on. On the flip side, you can typically build an app, pay operational costs and pay marketing costs for an entire year for $200,000-$500,000. Again, that’s not just startup costs...that’s being live an entire year (and you will generate cash flow before the year is over).
2. Easy to pivot. You always have to pivot in business. The way in which a business hits its stride will always look at least slightly different than initially planned for. The digital nature of an app allows the business to quickly make changes and get to healthy revenue.
3. Cashflow. Obviously, cashflow is a goal of any business, but apps sure are good at it! Whether it’s in-app purchases or a subscription, apps can be really great at quickly generating cash flow.

Apps may not be your thing, but hopefully, this has given you some ideas on how you may want to invest. If you do have an app idea and would like an investor, hit me up! You will need some working capital to put into it, but we are pretty good at finding a deal that suits everyone. Or, if you want to invest in apps send me a message. We do have fantastic app concepts with great owners come our way that could use more funding, and I will never recommend a deal to you that I don’t personally think has a reasonable chance of being profitable. Often it would be a situation where you and I are co-investors. Let’s make something happen!