Most first app builds are funded by a combination: personal savings or revenue from an existing business, pre-sales or deposits from early customers, and a small angel or pre-seed round. Grants are worth pursuing alongside but are slow. Accelerators suit first-time founders who need structure. Loans are rare and risky pre-revenue. Development partners with flexible payment terms can spread the cost so that less needs to be raised up front.
Prices are in US dollars. Euro and pound figures in parentheses are approximate, rounded conversions. Quotes are issued in the currency of your contract.
The build is scoped, the quote is in, and now the question is where the money comes from. There are more options than most founders realise, and the best plan usually combines two or three. This guide compares seven, in rough order of how often we see them work for a first product.
How do the options compare?
| Option | Typical amount | Cost to you | Speed | Control | Best for |
|---|---|---|---|---|---|
| Bootstrapping | Whatever you have | Your savings, your time | Immediate | Total | Small first releases, founders with income or savings |
| Pre-sales and deposits | $5,000 to $100,000 (€4,500 to €85,000, £3,500 to £75,000) | Delivery obligation | Weeks | Total | Products with an identifiable audience who feel the problem |
| Grants and competitions | $5,000 to $250,000 (€4,500 to €220,000, £3,500 to £185,000) | Time and paperwork | Months | Total, with reporting | Innovation, research, regional development, social impact |
| Angels and friends | $25,000 to $500,000 (€22,000 to €435,000, £18,000 to £370,000) | Equity, typically 5 to 20 percent | Weeks to months | High | Founders with a prototype and evidence |
| Accelerators | $20,000 to $150,000 (€17,000 to €130,000, £15,000 to £110,000) | Equity, typically 5 to 10 percent | Fixed intake cycles | High, with programme obligations | First-time founders who want structure and a network |
| Loans and revenue-based financing | Varies | Interest, personal guarantees | Weeks | Total, with repayment risk | Existing businesses adding a product, rarely pre-revenue startups |
| Partner financing | The build cost, spread | Usually a modest premium, sometimes a small stake | Immediate with the right partner | High | Founders with a scoped project and some funding, who want to reduce the upfront cash |
Option 1: Bootstrapping
Funding the build from savings, a salary or an existing business. It keeps every share and every decision, and it forces discipline about scope. The risk is running out before the product reaches users, so pair it with a narrow first release. See what different budgets buy to size it realistically.
Option 2: Pre-sales and deposits
The most underused option. If your validation found people with the problem, some of them will pay before the product exists: a founding-member price, a deposit against a first-year subscription, an annual plan paid upfront. It funds development with no dilution and it is the strongest evidence you can show anyone else. Be explicit that it is a pre-order, say when delivery is, and refund without argument if you miss it.
Option 3: Grants and competitions
Governments, regional development bodies, universities and corporations run grant programmes for innovation, research, digital transformation and social impact. Terms vary widely. The money is non-dilutive, which is the attraction, and slow, which is the problem. Apply in parallel with other options and never make the build wait for a decision. Founders in Europe and the UK in particular have more programmes available than they usually know about.
Option 4: Angels, friends and family
The most common first equity. Angels in your industry bring introductions and credibility along with money. Friends and family bring money and relationship risk, so document it properly with the same instruments an angel would use. This works best once you have a prototype and evidence. Our post on raising with a prototype covers the process.
Option 5: Accelerators
A fixed programme, a small investment and a network, in exchange for equity. Good accelerators are worth the equity for first-time founders who need structure, mentors and investor introductions. Weak ones take the equity and provide little. Ask alumni before applying, and look at what happened to companies two years after the programme.
Option 6: Loans and revenue-based financing
Debt is cheap money if you can repay it and dangerous money if you cannot. For a pre-revenue startup, most lenders will want a personal guarantee, which puts your house behind your app. For an existing business adding a digital product to a working revenue stream, a loan can be the cleanest option of all. Revenue-based financing, where repayments track sales, suits products with revenue already.
Option 7: Partner financing
Some development companies offer flexible payment: a deposit and instalments spread through and beyond the build, milestone-based payments that align cash out with progress, or in some cases an investment alongside the engagement. It does not replace funding but it can halve what you need up front, which can be the difference between raising a comfortable round and a desperate one. 7L offers flexible payment options tailored to the founder's situation, and invests in selected ventures on investor terms. Our view on equity for development explains why we keep the two separate.
What combination works for most first products?
- Bootstrap the validation. Interviews, a landing page, perhaps a no-code version. Hundreds of dollars, not thousands.
- Pre-sell to fund the prototype. Or fund it from savings. A clickable prototype is a small spend that unlocks the next two steps.
- Raise a small angel or pre-seed round on the prototype and evidence. Enough to build and launch the first release and reach the metrics for the next round.
- Use partner financing to stretch it. Spread the build cost so the round also covers marketing and the first improvements.
- Apply for grants in the background. If one lands, it extends the runway. If not, nothing was waiting on it.
How much do you actually need?
The build cost plus twelve months of running costs plus the marketing to reach the first few hundred customers plus a reserve of 20 to 30 percent. Founders who raise only the build cost launch a product with no money to tell anyone about it. Size the plan to the milestone, not to the invoice.
If you have a scoped project and want to talk through how to fund it, including what 7L's payment options and funding network can do for your situation, get in touch. Working out the money is part of the job, and we would rather do it with you than watch it go wrong.
Frequently asked questions
Should I pay for the whole build from savings if I can?
Only if it leaves you a reserve and money for launch. Spending everything on the build and nothing on reaching customers is the most common way self-funded products fail. A narrower release with a marketing budget usually beats a fuller release with none.
How much equity should I give angels for a first round?
Rounds at this stage commonly give away 10 to 20 percent in total. Less than that and the round is probably too small to reach the next milestone. More and the founders are diluted before the company has proven anything.
Are grants worth the paperwork?
Often, yes, especially in Europe and the UK where programmes for digital innovation are widespread. Treat the application as a side project with a deadline, not as the plan. If it works it extends the runway.
Can I combine pre-sales with a funding round?
Yes, and you should. Pre-sales are the evidence that makes the round easier. Investors see customers paying before launch and price the risk lower.
What does flexible payment from a development partner usually look like?
A deposit to start, payments at demonstrated milestones, and in some cases instalments that continue past launch. Terms depend on the project and the founder. Ask early, because it changes how much you need to raise.