Looking to snag that last minute reservation, an exclusive kitchen tour or have that new beet salad named after you at your favorite restaurant without becoming an equity investor? Foodstart, the first food and beverage-specific crowdfunding platform, may be your answer.
Founded by Alex Sheshunoff, the platform aims to help restaurants, food trucks, bakeries, breweries and co-ops raise capital in small increments, $50-$250, from their friends, family and future customers. Similar to Kickstarter, Foodstart campaign supporters receive rewards for their contribution in the form of a gift card for perks like discounts and VIP treatment. Since its launch in late 2012, 100 businesses have used the platform to raise capital. Foodstart makes money by taking a 4 percent cut of a campaign’s funding.
In addition to startup financing, the platform also welcomes the “restaurant raising money to redo their entrance, a startup brewing company in need of equipment, a food truck in need of a new set of wheels, a bakery which needs matching funds in order to qualify for an SBA loan, or a community food-growing coop in need of seeds,” according to its site. For existing businesses, Foodstart does not require a funding threshold, bur for new concepts the funding goal must be met, a la Kickstarter, to help ensure that projects goes through and backers receive their rewards.
“Most independent restaurant owners have limited financing options. A platform like Foodstart’s not only helps them raise capital, but almost as importantly, it creates a network of loyal customers. And that’s something traditional sources of capital have a hard time doing,” says advisory board member and former Ruby Tuesday’s CFO, Sam Rockwell, in an interview with Crowdfund Insider.
While the prospect of investing the cost of one dinner in exchange for menu item notoriety or $20 dollars for chocolate cake discounts may seem like a win-win for backers, Foodstart does not take responsibility for insurmountable complications. In instances where projects fall through before backers can collect on their rewards, “business owners have the choice of how to fulfill their obligation to their investors. That might mean transferring perks to another restaurant, a refund, or a long, written apology and sorrow-filled explanation about what went wrong,” explains the company on its site.
“When it comes to restaurants, many people want to feel like they are on the inside as much as they want a specific financial return,” Sheshunoff tells Crowdfund Insider. Foodstart hopes to capitalize on the former to boost foodies and food makers alike
Have you used Foodstart? We’d love to hear about your experience in the comments below.