How to Fund-raise for Your New Restaurant

One of the most challenging things when planning to open a new restaurant is definitely the money and everything that comes with it. Taking a leap of faith and getting stuck in a loan is by definition a risky endeavor. But what if you truly believe in your new idea and you are sure that your new restaurant will be very well received? Is there a way to get to the cash in a safer manner?

The answer you are looking for hides in the fund-raising. Fund-raising has taken a completely new form in the digital age. You no longer have to go out to meet people in person and convince them to pledge money for your idea – you can do everything online.

To help you fund-raise for a new restaurant, we decided to compile a list of all the places that make fund-raising a walk in the park.
The Kickstarter community is global and there are well over 10 million of people standing by to invest their hard-earned cash in an idea they deem valuable.
Kickstarter

The Kickstarter platform is the bread and butter of convenient fund-raising. You will be able to pitch your restaurant idea to millions of people, even if you choose to do so from the comfort of your living room.

Although it started as a small website 10 years ago, Kickstarter has become the go-to place for all the creative people in need of cash to bring their ideas into reality. The Kickstarter community is global and there are well over 10 million of people standing by to invest their hard-earned cash in an idea they deem valuable.

Why is Kickstarter good for raising funds for your new restaurant? Because it gives you complete control over your project. You will be able to create your project page on the website and present your idea down to every little detail. You can include pictures, your business plan, and market research. Basically everything you need to back up your idea.

Over the course of the past 10 years, Kickstarter has made sure that almost 165,000 projects see the light of day. The Kickstarter community has pledged well over $4 billion. What's even better, once you pitch your project to the Kickstarter community, you are bound to receive valuable insight from your backers.

A part of the Kickstarter community is actually keeping an eye out for interesting projects in the hospitality niche and these people are genuinely interested in helping you get enough funds to start your restaurant business. Make sure to stay tuned to that "Comments" section and live up to your promises if you want the backers to support you in any forthcoming projects.

There are already a dozen of restaurant-related projects on the platform. You can check them out at this link. The platform is very easy to use and you don't have to be an IT guru to start a project, which makes it an even more convenient opportunity for fund-raising.
Indiegogo

Indiegogo is a platform similar to Kickstart. Their business model revolves around crowdfunding. and the platform is quite popular. There are several thousands of new crowdfunding campaigns per week. Since the Indiegogo community looks for opportunities to invest money in innovative projects as they emerge, this is a great opportunity for you.

People on Indiegogo really appreciate a good story behind the project. If you decide to test your plan on this platform, we suggest you devote some time to writing a compelling story and make a list of FAQs. Lay out your plan and your intention as well. For instance, how much money you aim to raise, what you will use it for, do the backers get a pre-opening dinner treat, and so on.

While we are talking about repaying the backers in some way, Indiegogo features the Perk system you can use to incentivize people to pledge more money. The founders of the platform found that campaigns with perks raise significantly more cash than those without them. You can learn more about perks and how to use them here.

Indiegogo also allows video uploading. You should consider this, as a video can help you communicate the details about your restaurant idea that would be otherwise impossible to convey. There is a comment section here as well, so make sure to reply to the backers' questions and address any concerns they might have.

Foodstart

Foodstart is another crowdfunding portal where you can raise funds for your restaurant. Unlike Kickstarter and Indiegogo, Foodstart only specializes in the food and beverage industry. Whether you want to launch a snack bar, a restaurant or make people happy with delicious bites from a food truck, the Foodstart community can help you achieve it.

Foodstart made its services available in 2012, and since then this platform has helped hundreds of entrepreneurs materialize their dreams. There are some very famous names from the fund-raising industry on the advisory board of Foodstart.

For instance, the founder of Ingenio.com, a famous company that raised well over $100 million in private capital. There is also the former CFO of Ruby Tuesdays, who is a huge name in the food industry and who has raised over a billion in the private and public sectors combined.

This platform has a similar system as Indiegogo. It uses the perks system to help the people motivate backers to give them funds. The perks system can be used to deliver discounts, free food, cooking seminars, guaranteed tables, and other attractive things.
Funds focused on food

It is important to note that once you go through the crowdfunding opportunities, you are still not out of options. There are dozens of funds focused on food and beverage. They work differently than crowdfunding platforms, but if your idea is worth their money, the chances are that you are going to get it, in some instances even with no strings attached.

Unlike crowdfunding options, funds focused on the food and beverage industry are going to be there to see your operation through. This means that you will be able to tap into their network and expertise to not only kickstart your business, but to plan actions for the future, scale, and grow.

Chobani Incubator

Chobani Incubator is a company looking forward to investing in restaurants creating nutritious and delicious meals. Chobani Incubator's mission is to help people get to affordable food in a more convenient manner. This is why they are on the constant lookout for companies who can make that happen.

Chobani's philosophy is all about DNNA – delicious, nutritional, natural, and accessible. If your restaurant is going to challenge the food industry, deliver innovations, and most importantly, truly make a difference in terms of food accessibility, Chobani is your go-to company.

If you enter the Chobani program, you will be able to learn a lot about building a sustainable business, branding, marketing, scaling, packaging, pricing, and so on. Chobani doesn't want to provide you with funds and disappear. This company aims to make long-lasting and supportive partnerships with small players in the food niche.

Kitchen Town Central

Kitchen Town Central specializes in food startups. This company even has its huge facilities designed to help entrepreneurs kickstart their own food and beverage establishments. But KTC is not like any other company dedicated to helping potential restaurant owners start their business.

Instead of pumping funds directly into a project, KTC has a very unique business model. If you pitch your idea to them, and they like it, you will be able to use their facilities to scale up your production, bring different products to life, and even test out brand new and experimental recipes.

Among the many services KTC offers, we would like to point out those of their Product Innovation Lab. KTC product development services can help you get your products from a list of ingredients on a piece of paper to food ready for market. This includes prototyping, commercialization, product labeling, and so on.

Kitchen Fund

Kitchen Fund is yet another door you can knock on to get your restaurant project funded. Since Kitchen Fund specializes in all things food and beverage, you will be able to receive so much more from them than just funds. Besides the cash injection, you are also going to be introduced to other important companies in the niche, including potential partners and suppliers.

If you truly want to deliver a unique experience and make your customers feel like they are part of something really special, Kitchen Fun will gladly get you under its wing. They will assess your project and provide you with access to valuable resources and manpower to make it happen.

You can expect to get advice in terms of marketing, branding, POS choice, growth planning, and so on. Some of the famous restaurants that started off as KItchen Fund projects include CAVA, The Pie Hole, Inday, Curry Up Now, Sweetgreen, and many others.

Cleveland Avenue

Cleveland Avenue has made it clear that they want to help anyone with a great restaurant idea to start a business as soon as possible. Thanks to their years in the food and beverage landscape, Cleveland Avenue is able to support entrepreneurs not only plan their business but also sustain its growth without sacrificing the quality of products and service.

The idea is simple, for the food to be delicious, it has to be made with soul, and that is exactly what new people have to offer to the hospitality and food industry in general. This company will definitely value your creativity and ambition to make a difference in this market.

What does the Cleveland Avenue offer beside access to financial resources? You will be able to benefit thanks to the collaboration and expertise of company employees. Some of the projects Cleveland Avenue has funded include Farmwise, Bright Cellars, FoodBoss, PizzaRev, Somrus, and many others.

Enlightened Hospitality Investments

EHI is one of the few strategic investors focused on helping restaurants succeed in the hospitality industry. The main goal of EHI is to identify the value-added potential of your project and help you emphasize it to make it on the market.

If your project gets a green light, EHI will make its resources available to you. This includes financial aid, relevant contacts, strategic direction, and marketing strategy. EHI is devoted to helping its partners achieve sustainable growth. Their primary focus is on fine causal restaurants.

But since EHI is more focused on expansion, you might want to save this ace up your sleeve for times when you plan to conquer new markets and open up new locations. The EHI family is huge. Some of the EHI-enabled restaurants include Bay Room, Blue Smoke, Cafes at Moma, Maialino, and others.

AP Franchised Concepts

AP Franchised Concepts has pretty much the same business model as EHI. They are focused on investing in restaurants that are already established on the market. AP Franchised Concepts is there to help you plan and execute your growth strategy while avoiding the major pitfalls.

If you are less experienced with infrastructure-related issues and business processes, AP Franchised Concepts specializes in this sort of thing. This partnership will ensure that you sustain your business growth and continue to deliver the same service across all locations.
Angel Investors

An angel investor is a convenient name for any individual willing to invest in a business idea. In return, these investors either seek ownership equity or some sort of convertible debt. The AngelList is a platform where you can present your restaurant idea to millions of angel investors around the world.

Currently, there are more than 1,000 investors on this platform interested in the hospitality niche. There are other platforms to expand your search on, including Angel Capital Association and Gust. Some of these platforms organize events which you should definitely hit if you decide to go with an angel investor.

Whether you decide to pursue crowdfunding or company-funded opportunities, you still need to have a business plan. Once you have everything in written form and you are clear about your goals and objectives, we advise you to explore different options and choose the one that resonates well with your overall agenda.
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