With big bucks hard to muster, resourceful restaurateurs are tapping the community to raise funds the old fashioned way—one investor at a time.
When Todd Spitzer ran out of money to open his Remedy coffee shop last year, he decided to set up a kiosk outside his still-unopened Oakland storefront. While serving up his fresh-brewed coffee, he discovered something unexpected: residents were excited about his café and wanted to chip in. With the help of people he’d just met, Spitzer opened in May, and business is booming.
With bank loans scarce, Spitzer’s model of small community donations is catching on, thanks in part to new websites such as Kickstarter and ChipIn, which connects individual lenders to small businesses. Erin Wade and Allison Arevalo recently raised $7,500 through Kickstarter for Homeroom, an Oakland restaurant they hope to open early next year.
“It was amazing,” says Wade of the outpouring of support. “For us, it’ll be the difference between opening up a restaurant and opening up a really cool restaurant.”
Heather Sittig, who aims to open Toast Wine Lounge in Rockridge in January, says she and her partners expect to raise 30 percent of their start-up costs locally, mainly by preselling vouchers for glasses of wine and lounge memberships to residents. Sittig says the benefits for Toast extend beyond just the cash raised: Community members who own a personal stake in the restaurant are much more likely to support it.
“We call it a modern-day barn raising,” says Sittig. “We’re getting the community together to do something we can all enjoy.”