In these heady days of crowdfunding, the question often isn't who is asking for money, but who isn't?
Restaurants are no exception. Browse sites such as Kickstarter and Indiegogo and you're bound to find a variety of eateries competing for your time and cash. Some of the area's best, and hottest, restaurants, such as Rose's Luxury and Bad Saint, turned to crowdfunding to raise enough money to open their doors, and several upcoming projects are hoping to follow in their footsteps.
Pastry chef Tiffany MacIsaac just launched a Kickstarter campaign to raise an additional $46,000 for her forthcoming Buttercream Bakeshop in Shaw. The former executive pastry chef at Neighborhood Restaurant Group says the figure would represent 5 to 6 percent of the total budget for the project.
"Turns out I need a little more money to get my equipment," she said.
With the funds she's trying to raise on Kickstarter -- it's an all-or-nothing proposition -- MacIsaac would be able to buy a second oven and another mixer. She's already scored auction deals on some items, including one large mixer, but she said "there are just some things you have to buy new." And she hopes potential contributors understand.
"For someone like me, this is a huge financial undertaking. I'm a regular person," she said. "I don't have hundreds of thousands of dollars lying around."
MacIsaac said the whole process of opening her first solo venture has been a seat-of-the-pants learning experience. When she first started planning, she didn't know how much she was going to need. In an ideal world, she would have raised exactly the right amount through a combination of two rounds of investments, her own savings and a small loan. "You kind of piece it together," she said.
That's the same strategy being taken by chef Nicholas Sharpe, who's hoping to open Jolene in Adams Morgan this spring or summer, and husband-and-wife team Dusty Lockhart and chef Stefano Frigerio (Fiola, Mio, Maestro), who are planning to open Petit Loulou, a creperie, bakery and coffee shop in Purcellville, in June. Both projects recently launched crowdfunding drives, Jolene on Kickstarter and Petit Loulou on Indiegogo.
Sharpe, whose résumé includes After Peacock Room, Vidalia and the late Maestro, has a $20,000 campaign goal, which he said would be about 5 percent of his total budget. (He briefly appeared at Prequel, the pop-up-hosting space in Penn Quarter for restaurants being funded through Equity Eats, another crowdfunding platform.) The Kickstarter funds would primarily go toward the 400 to 500 custom plates the chef would like to order from a local artist. Sharpe said he needs to put up a significant amount of money so that the one-man operation can afford to take on the commission. Whatever remains could also be used for permit and lawyer fees as well as opening costs for food; should anything remain at that point, he'd maybe allocate it to building an inventory of wine and spirits. (Anyone crowdfunding though a platform must also account for fees associated with the campaign; Kickstarter and Indiegogo both take 5 percent of the funds raised as a fee, in addition to about a 3 percent processing fee per contribution.)
"Every bit's going to kind of go into making the restaurant better," Sharpe said. If he manages things right, he'll be able to add the kind of touches he thinks will enhance the overall experience.
Lockhart, a restaurant publicist, said the $20,000 goal for Petit Loulou falls into the "would have been nice" category. (They'll raise whatever's committed rather than having to meet the goal; Indiegogo lets campaigns choose between this "flexible" model and all-or-nothing.) The money, a little less than 10 percent of the $215,000 startup budget, would help with items such as chairs, tables and artwork -- as in, nothing that would prevent the cafe from opening.
"I don't think anybody should go into a crowd raise if you can't open without that money," Lockhart said.
MacIsaac and Sharpe said their campaigns aren't do or die either. "At the end of the day, I'd find a way," MacIsaac said.
So if it's not just about the money, what is it?
Lockhart said one of the goals was to rally Purcellville around the new business. "You're never going to make that much in crowdfunding, especially in a place like this," she said.
"I think having a kind of built-in following when you get started is a big help," Sharpe said. A campaign also gives restaurateurs an opportunity to float their concept to potential diners and get feedback, he said. Plus, any public support can be a boon if you have to go back to your larger investors to ask for more money.
One downside of crowdfunding is that your contributors may wonder whether your concept can be lucrative or even workable, said Alex McCoy, who just opened Thai spot Alfie's near Petworth. He and his partners decided not to pursue crowdfunding for Alfie's, in part because they wanted to put the concept out for testing, to reach potential diners and "actually show them the product and tell them the story," especially since the goal was more about exposure than money. To raise cash, they held supper clubs around town.
Not that McCoy is against the idea of crowdfunding. Had he been opening his former post, Duke's Grocery, now, he said, he'd probably go that route. It took several years to figure out how to get the sandwich shop off the ground. "We kind of scraped up whatever we could," he said.
For those who do ask for money from the public, the question is often how to stand out. MacIsaac said there are a lot of causes and business trying to crowdfund, which can make it hard for contributors to decide where to give. She said she hopes her bakery concept will be attractive because of the "real emotional connection to desserts and pastries" that people often have.
To attract potential backers to their cause, businesses usually offer specific incentives in exchange for a contribution, and such perks will necessarily cut into the chefs' net gain from the campaigns. MacIsaac's rewards will include goodies from the shop (from $39), the opportunity to spend a day in the kitchen with her and her partner, Alexandra Mudry, ($650) and a wedding cake ($1,250). At Petit Loulou, contributors can earn the chance to name a crepe on the menu ($500) or join a pre-opening croissant tasting ($50), among other things. Sharpe said Jolene campaign backers can qualify for free appetizers ($20), meals (from $55) or, for the highest amounts, private dinners in their homes (from $2,500).
Ultimately, Sharpe believes those types of rewards are the best form of accountability chefs and restaurateurs have to show contributors how their money is being used.
"There's no other way to prove yourself other than cooking for somebody," he said.