Seattle Restaurateurs Turn to Kickstarter and Founders Clubs
With Kickstarter, restaurateurs get creative when it comes to investors.
About three minutes into the video that pastry chef Autumn Martin posted on her Kickstarter page, detailing the plans for her new Ballard confectionary, she cuts to the goods: “We have run into some hiccups….” Low on funds, Martin explains, she joined Kickstarter, the online fundraising platform, with the goal of generating $25,000 to cover construction costs and qualify her kitchen to be certifiably organic.
“I was like, ‘You know, this could actually be cool,’ ” she said. Not as cool: Should she fall short of meeting that goal, all money would be returned, leaving Martin on the hook for those expenses.
Since debuting in 2009, Kickstarter has seen more than 23,000 projects take root and $230 million in pledges. The site’s now the largest funding platform in the world. But close to half of the ventures launched via the startup incubator, which operates on an all-or-nothing basis, flatline.
On Kickstarter, backers contribute knowing that, unlike typical investors, they will see no tangible benefit. “Rewards” valued as high as $10,000 are permitted—Martin offered private parties and goodie bags to lure investors—but monetary returns are prohibited.
Film and music productions are the most common Kickstarter campaigns, with gaming and publishing ventures not far behind. In Seattle, food-driven proposals have gained traction. In February, John Sundstrom of Capitol Hill restaurant Lark raised $33,000 to finance a cookbook. It took him one week.
But these endeavors can be squeakers. A few days before the deadline of her Kickstarter campaign, Martin, who formerly served as pastry chef at Canlis and head chocolatier at Theo Chocolate, was several thousand dollars away from her goal. In the end, her Hot Cakes shop, named for the molten chocolate desserts that made her a farmers market legend, opened in late May—and she generated a total of $28,318 on Kickstarter.
Restaurateur Heather Earnhardt decided to forgo Kickstarter and instead launched a “founders club” for her new Capitol Hill spot the Wandering Goose. “Nowadays, loans for opening a restaurant are pretty much nonexistent—unless you have money, which I didn’t,” she says. Since May, Earnhardt has issued gift cards valued at 25 percent above a donation: Give $1,000 and get $1,250 in dining credit. (Chef and Rover’s owner Thierry Rautureau employed a similar system at Luc, as did Scott Staples at Restaurant Zoë.) This way Earnhardt doesn’t have to partner with more investors who would take away from her share of profits—if there are profits to be had. Plus, Earnhardt can pocket the cash if she misses her goal—unlike on Kickstarter.