Want to Crowdfund Your Restaurant?

Crowdfunding was a term for dreamers–a term where e-ink watches and a Veronica Mars movie can turn to life. But lately, there has been a different medium where crowdfunding has hit its vibe: Restaurants. And in a few ways, it makes a lot of sense.


1. You Build a Customer Base Right From the Beginning

By creating incentives for people to invest in your restaurant, you have an opportunity to create repeats–something that could take months, years to create for ordinary restaurants.

Crowdfunding sites (which we’ll get to in a moment) already implement pledge gifts (which interesting, one of the Frogs note that it’s more a public radio thing than anything). So by using certain perks like coupons, sneak-peeks, and loyalty cards could be an easy pull for your incoming customers.

But keep track of the people who do fund your campaign. It can be easy to mistake customers who actually care from investors who want to show where their money counts.

2. You Develop Plenty of Media Presence

While having Facebook and Twitter followers is obviously a good thing (us Frogs have quite a lot), it’s even better to show that on your crowdfunding campaign that you came prepared.

By already showing off your website, your logo, and (if it’s done already) your menu, you are already giving a taste of what your customers can expect. This kind of transparency may be too revealing for some, but for a lot of prospective owners–this exposure might be all worth it.

3. But It’s a Risky Proposition To Take

This article from Bon Appetit spells horror about the potential cons about opening a restaurant, and it does bring up some good points.

Beyond what the food magazine lists, you have to keep in mind that not every crowdfunding campaign will work. Especially with Kickstarter where all projects are all-or-nothing (so if your project doesn’t hit its goal, then your project won’t be funded at all), there’s a considerable risk to take when you go to the world of crowdfunding.

Ideally, this will probably benefit existing restaurants who want to take on new projects. But restaurants have had successful crowdfunding campaigns and live to tell about it.

4. So What Campaigns Are Out There?

To get it out of the way Kickstarter and Indiegogo are the two gold standards of crowdfunding, with the former perhaps more significant than the latter. Kickstarter will likely fit most, while Indiegogo focuses on smaller and non-profit projects.

But those two are not the only crowdfunding projects out there. If you are a really small restaurant or a food truck there’s GoFundMe. And if you want to crowdfund specifically for restaurants there’s FoodStart. And finally if you are a Washington D.C. resident and you plan to open a restaurant within the area there’s EquityEats–where your backers can also have a percentage share of your restaurant (so they’re pretty much investors).

But keep in mind that this is not for the feint of heart, and if you have any doubts you can come to One Fat Frog and get easy and quick financing. But if are the brave and the bold, crowdfund away.