investing in a released iphone app?

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Topic Author
gips
Posts: 672
Joined: Mon May 13, 2013 5:42 pm

investing in a released iphone app?

Post by gips »

Hi,

I may have an opportunity to invest in an already coded and released iphone app. I have a deep tech background but haven't worked in mobile. The obvious questions to ask the app owner are:

- # downloads
- # paying customers/conversion rate
- income statement
- balance sheet
- product roadmap
- competitive landscape
- barriers to entry (why hasn't it been a success)

My sense is the vast majority of apps don't make money and I should pass. Anyone have experience in this arena?

tia,
Nummerkins
Posts: 480
Joined: Tue Jun 01, 2010 4:41 pm

Re: investing in a released iphone app?

Post by Nummerkins »

I would pass. Its already released... but needs outside money?

Also, people don't want to pay for apps -- they are used to free. Nintendo of all companies couldn't get people to pony up $10 for a polished game.

There's a reason why the app stores are jam packed with micro-transaction garbage...
Today's high is tomorrow's low.
Doctor Rhythm
Posts: 425
Joined: Mon Jan 22, 2018 3:55 am

Re: investing in a released iphone app?

Post by Doctor Rhythm »

No personal experience, sorry - but I’d also wonder how much longer the developer will support the app. The less ownership stake they have in the app, the less motivated they would be to promote and update it, especially if they now have capital (courtesy you) to develop a new product.

What also feels different in this scenario is that your investment will almost inevitably lose value over time. It’s investing in a diminishing income stream, in that sales are expected to decline over time (perhaps quickly), unless this a huge product from an established company. Contrast that with investing in rental property or a business itself which you hope would produce stable or growing income indefinitely.

This isn’t a Bogleheads kind of investment of course, but good luck either way.
Last edited by Doctor Rhythm on Sat Oct 17, 2020 3:50 pm, edited 1 time in total.
retired@50
Posts: 3463
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: investing in a released iphone app?

Post by retired@50 »

I'd consider this investment only as part of a "fun money / speculation" account that is less than 5% of your net worth. If you don't have such an account, then I wouldn't create one over this app. Just my 2 cents.

Regards,
This is one person's opinion. Nothing more.
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Stinky
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Location: Sweet Home Alabama

Re: investing in a released iphone app?

Post by Stinky »

Nummerkins wrote: Sat Oct 17, 2020 3:36 pm I would pass. Its already released... but needs outside money?
I agree. Why would the app developer need more capital now on an already released app?

Sounds like he/she wants to cash out and leave you holding the bag...... :twisted:
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Topic Author
gips
Posts: 672
Joined: Mon May 13, 2013 5:42 pm

Re: investing in a released iphone app?

Post by gips »

thanks for the replies! the capital infusion is for a marketing campaign, not development. I believe I would receive a percentage of each new sign up (tbd).
Marengo
Posts: 18
Joined: Mon Dec 18, 2017 9:45 pm

Re: investing in a released iphone app?

Post by Marengo »

Do you think the app hasn’t been successful because of a lack of exposure? Do you think the marketing strategy is actually likely to lead to enough paying customers to recoup your investment?

More broadly, do you think this app really has a chance to succeed? Indie app developers tend to make money when they offer a very unique app that has a targeted market that is likely to pay for it.
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