How to Get Funding for Your SaaS

So you have a fantastic idea for a software solution that just can’t go ignored. With the SaaS revolution having opened up platform independence, ubiquitous super computing and profitability of niche solution marketing, there’s no excuse to not build every great idea, right? Well, it should seem that way, but oh my, SaaS funding can be difficult to come by at the moment can’t it?

Well, SaaS funding is so difficult right now simply because we’re in a transitory phase with this technology. It’s no longer a new, undervalued platform, but it’s still new enough that not everyone understands it. Browser-based solutions, in the eyes of a lot of older computer users and businesses, may still summon to mind the earlier attempts at this with archaic java applets, old Flash architecture and the like. It’s easy to forget that the modern web is a different animal, with AJAX and HTML5 making easily-designed, standard web interfaces every bit as rich and smooth as classic software models.

So, you have to address this obstacle. The first thing to do is avoid overuse of the term  ‘SaaS’ when approaching potential sources of SaaS funding, until you have them familiarized with what SaaS is today.

Moving from there, showing them the potential benefits of designing an SaaS solution is a good way to get people on board. Show them that it’s more profitable, eliminating the need for stamping CDs, investing in DRM to prevent piracy losses, maintenance and other issues that traditional software unavoidably brings about. Along with this, the steady income model involved n subscription-based services will entice a lot of investors.

Now, that covers how to approach people for funding, but where do you go to find people to approach? Well, that depends on what your preference is. Do you like to deal with people face to face or the digital equivalent of that? Then using marketing models to reach out for funds will work for you, if modified to get investors rather than customers.

It helps a lot if you build a name for your development team first, by publishing smaller things, such as extensions for existing software (Salesforce apps, browser extensions, WordPress plugins etc). Then, when the time comes, not only will you have made some initial venture capital for your project from your previous, smaller outings, but putting the word out that you, a developer of well-received smallscale projects, are looking to build something big and significant, will garner people with an interest in helping make it happen.

Finally, I want to mention one channel by name, and that’s Kickstarter. There are other services like them, but I’ve had success with this one and have seen many others also have success with it. Post your project there, show what your goals are, what problems you want to solve, and promise investors good incentives. If your idea is good, you have something already in place to show you’re capable of what you say you want to do, and the investors will show themselves. If you build it, as they say, they will come.

So, getting SaaS funding isn’t that difficult, there are channels to do it, and marketing skills work here. Your biggest hurdle will be in overcoming remaining ignorance about SaaS as a concept, plain and simple.

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Omri Erel
Omri is the Head of Demand Generation, as well as the Lead Author & Editor of the SaaSAddict Blog. Omri established the SaaSAddict blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to SaaS and cloud migration.
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