Crowdfunding? Come on, that’s not new…
No, but it does keep breaking unexpected boundaries in the hospitality sector. Gary Usher just smashed his crowdfunding target, raising £50k in just one hour on crowdfund website Kickstarter.
Hang on a minute- that sounds familiar.
You’re probably thinking of his last crowdfund campaign for his Wreckfish restaurant in Liverpool, which broke records for being the most money ever raised for a restaurant on Kickstarter UK. He also raised over £350,000 the same way to launch Hispi in Chorlton and Burnt Truffle in..
OK, OK, I get it. He’s clearly got a knack for it, then.
Usher’s crowdfund model is different to some, where backers own a stake in the business that they invest in. For his campaigns, Usher offers rewards to those who pledge (£25 to have your name on the restaurant wall; £1000 for the chef to never use the word ‘emoticon’ again; over-the-odds priced aprons) but most of the finance comes from prospective customers buying meals in advance.
Seems like the best way to do it.
It certainly works for him- and who wouldn’t like to help out a new business and get something for yourself at the same time? The sadly now-closed Scandinavian restaurant Norse in Harrogate used Kickstarter to fund its move to a bigger site, and offered similar gifts including meals at a variety of price points; aprons; and meal deliveries for whole offices.
So basically, people just buy things? I’m surprised nobody’s got bored of this yet…
That’s more of less the gist of it, but other sites use different methods, like having backers invest for equity stakes.
Er, doesn’t sound as fun as actually getting something out of it…
Maybe not as fun, but definitely effective. Vegan burger company The Vurger Co. became the fastest ever restaurant to hit its target on Crowdcube, a crowdfunding site that offers equity stakes as opposed to rewards. Owners Rachel Hugh and Neil Potts hit their £180,000 goal within 30 hours, and hit £300,000 in 77 hours.
Impressive. Especially for a vegan company…
Vegans actually do really well on crowdfund websites. Vegan, sugar-free, wheat-free and alcohol-free restaurant Redemption Bar exceeded its £300,000 crowdfund target on Crowdcube.
It seems like if you want to succeed, you should be a vegan business?
Not always. Vegan coffee shop The Fields Beneath attempted to crowdfund £30,000 so that it could get a new kitchen to prepare food instead of using the nearby school. It offered gifts, including prints; film nights; baking classes; and brunch parties, but it sadly didn’t make target and the page was closed.
So it didn’t open?
No, the restaurant said it had a ‘plan B’ in the pipeline. Not all restaurants give up the dream when they don’t make target, though. Kurobuta founder Scott Hallsworth launched a crowdfund campaign, aiming to raise £22,000 to open a permanent iteration of pan-Asian pop up restaurant Freakscene. He failed to get his freak on, only raising £6,831, but still went ahead and opened the restaurant anyway, explaining on Twitter that he is “too legit to quit”. Anton Piotrowski did the same with his restaurant, Roski.
So now that crowdfunding is cool again, who should I be backing? I’ve got a few spare quid.
-London restaurant Native has launched a crowdfunding campaign to help it relocate to a new site following its closure last week. It was forced to shut when it was refused planning permission, and landlord Shaftsbury refused to renew its lease. It is crowdfunding here to raise £50,000. It’s a Kickstarter campaign, and rewards range from beanie hats to wedding breakfasts.
-Also looking for funding is chef Ernst Van Zyl, formerly of London Hilton Park Hotel; the Lord Clyde in Kerridge; and the Hanging Gate Inn in Cheshire. He is aiming to raise £30,000 to open modern British restaurant Klok in Stockport. He has chosen to use JustGiving to raise the money, which is an unusual choice as it is usually used for charity, and he has been stuck around the £700 mark for a while. Click here to help him get closer to the funding.
-On 14th June, Harts Group Ltd. (parent company of Barrafina and Quo Vadis) will launch its first crowdfunding campaign, aiming to raise £750,000 to contribute to the opening of Barrafina Kings Cross. We have a feeling it won’t have a problem reaching target, but keep an eye out for it nonetheless.