One way to get around the main problems when looking for an investor for an iOS application

There may be three problems:

• The investor wants full control over the application or company;
• The profile investor limits the freedom of creativity (for example, in the game);
• A non-core investor often does not give a large amount and does not provide various bonuses that the profile ones have.

Plus, it can be very difficult to believe in a project: many investors need things that repeat the stories of some other projects, but with slight changes. In really unusual new applications, it is often planned to invest after proof of sales, when the investor is not really needed.

Today, there is already a team of iOS developers doing a kind of remake of The Lost Vikings, which decided to try crowdinvesting and turned to us in the Smartmarket. And that's why they did it.
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Brief introductory

Smartmarket is the future ecosystem for crowdinvesting. Type as a Russian kickstarter, not only for donates or pre-orders, but for micro-investors, that is, those who in the future will have a small share in profits. This is the first such project in Russia, and we are starting up in full only after a month or two, now there is a rather complicated process of summarizing all this legal base. But projects are now being considered - and there are already several dozen who have undergone rigorous preliminary selection. Among them is the project of the iOS development team, which will be one of the first to be hosted - in about a couple of weeks it will be possible to participate.

Why did they decide to crowdinvest?

First, they have a rather unusual application to find a profile investor for it (as a rule, they are conservative). Secondly, all available investment options either did not fit the conditions, or implied the transfer of project management to someone else, which did not suit the team. The situation is very simple: a game company is a factory, and it’s just foolish to give a share in it for the sake of financing the first product (unless it’s a very small share). You need to count with the prospect of N projects for N years. But no investor at this level will agree to receive a share of a couple of percent. Accordingly, alternative work options are needed.

Firstly, the team itself lives in Russia and does business here . They are not very interesting to register an offshore. This, among other things, closes the exit to the kickstarter - only Americans are allowed in there.

Thirdly, they themselves are interested in the crowdinvesting model . Here it is necessary to stop in more detail. And there are several reasons for this:

• Crowdinvesting will immediately give a “live” assessment of the project: people who are ready to finance the team’s work will, in fact, indicate the cost of the project themselves. This is very important for many large companies (which often sell 1–2 percent of shares to get such an estimate). And this assessment will mean the possibility of reaching the next step - to investors who are operated on amounts from a million dollars and above. Noticeably higher.
• But this is still too early to dream. Now the main task is to release the application (in our case, the game) and make it popular. Crowdinvesting gives two advantages at once: there will be a lot of testers who are ready to give really useful information for the game as a whole (and, unlike friends, they do it in an extremely objective and reasonable way). Secondly, of course, this is marketing at the start: at least a hundred reviews from different people, hundreds of ratings, dozens of reviews in social networks and hundreds of tweets is a very sour bonus at the start.
• Third, of course, they will get the money. Exactly as much as is needed for development and marketing after launch.
• Fourthly - communication. There is a kind of exchange here: investors receive complete information about the project from the inside, and help it as much as they can. And they can often be very, very good: for sure, someone will own a popular platform, someone will just tell friends about the exit of the application, someone will help to find excellent freelancers (if they are needed), someone will be able to do something for project. In general, good connections rule here.

What will the team give in return? Information about the project first-hand (this, by the way, is an opportunity to understand in details the development and marketing under iOS), plus profit. If the application “shoots” (and everyone will work on it, so this is very likely), each of the investors will receive a very warm reward and the opportunity to make a profit all the lifetime of the project, that is, a couple of years of sales in Appstor at least.

What's more interesting, the team is now closely involved in the development of games for iOS (and later for other mobile OS) games on the Unreal engine. Three projects are in operation: two of them have found private investors, and the current one (this, by the way, is a remake of Lost Vikings in Trine’s visual stylist) will be crowded in on our site. The team is focused strictly on profit after the launch of the project, and not on certain abstractions of the level “recruit a client base, we will evaluate, sell another piece”, so sharing will not be a share in the company, but a share in the profit in a particular project. By itself, the team already has a good experience with the engine. The development of a crowd-invested project will take about 8 months and will require up to 300 thousand dollars. The finished project will be offered to Western publishers, or will be promoted on their own by reinvesting funds from sales, plus cross-promo from already running games.

As I already mentioned, we are now working out the legal mechanisms for the implementation of this and a dozen other projects: the task is to ensure that even relatively small transactions pass normally without hemorrhoids for both the investor and the company receiving funds.

If interested, subscribe to our corporate blog here or follow the site. When the exact details on the development itself appear, when it will be possible to ask questions to the developers, see the detailed data of this kind and get all the details - you will have a rare opportunity to invest in small amounts in what you understand well, that is, completely sober and healthy.

And now the question for iOS developers : would you be ready to sell, say, 20% of future profits on such mechanics to the masters?