Crowdfunding can provide an additional source of start-up funds for restaurants, food trucks and kitchens. Photo: Dominic Torrell/Flickr
Crowdfunding can provide an additional source of start-up funds for restaurants, food trucks and kitchens. Photo: Dominic Torell/Flickr

Starting a restaurant can take $450,000 on average if the founders want to own the land and $250,000 even if they just lease it. That kind of money is not easy to come by.

That’s why, with traditional financing for restaurateurs drying up, more and more food projects are turning to crowdfunding sources, according to the New York Times. Typically this has meant using sites like Kickstarter and Indiegogo to introduce a project and ask people for the money to fund that project.

There are some key differences between the two giants in the crowdfunding space:

1. Kickstarter only releases funds for a project if they reach a set target funding goal. If that target isn’t reached, then the money is all returned to the donors and the project gets nothing. Indiegogo has no such rule. However, because there is no target, there can also be less sense of urgency for Indiegogo donors.

2. Kickstarter only allows funding for creative projects, meaning that it isn’t supposed to be used to start businesses or fund ongoing costs.

3. Kickstarter is significantly bigger and buzzier than any other platform out there — with far more donors and more press coverage for projects.

Foodie Crowd Funding targets existing small restaurants. Image: Foodie Crowd Funding
Foodie Crowd Funding targets existing small restaurants. Image: Foodie Crowd Funding

But, with the growing popularity of crowdfunding for food projects — restaurants, wholesale food, food trucks — food-specific crowdfunding sites, like Foodstart, Foodie Crowd Funding and Fun-dit, are popping up.

“Crowdfunding will be a key part of any small business,” said Alex Sheshunoff, the founder of Foodstart. “Restaurants have always received money from a basket of sources. Crowdfunding is part of that basket.”

Foodstart has attracted 140 food-focused projects. Image: Foodstart
Foodstart has attracted 140 food-focused projects. Image: Foodstart

Foodstart launched earlier this summer as a platform for food and dining crowdfunding projects. Sheshunoff said that compared to the non-food-focused crowdfunding places Foodstart offers the ability for restaurants to fund smaller, practical, non-creative projects, like a new patio or menu expansion. Existing restaurants don’t have to hit a funding target to raise money. Foodstart also provides backers with a rewards card that they can then redeem at the locations they donated to, which Sheshunoff said market research showed they wanted. The company provides that market research to the projects and connects projects with experts in the industry, like providing a consultation with dining industry lawyers. They’re also about to launch, said Sheshunoff, help with getting traditional loans or using the crowdfunding as capital to get a larger loan.

Most importantly, though, Foodstart offers “a community of people who feel passionately about food and dining,” Sheshunoff said.

Fun-Dit provides crowdfunding for mobile food companies. Photo: Fun-Dit
Fun-Dit provides crowdfunding for mobile food companies. Photo: Fun-Dit

Foodstart isn’t the only food-focused crowdfunding site that has popped up recently. Foodie Crowd Funding, which focuses on allowing existing restaurants to expand, and Fun-dit, which focuses on food trucks and pop-up food stands, are also targeting the growing food crowdfunding space.

But, with these platforms still being new there aren’t many projects (or many donors) on them yet. Foodstart has about 140 projects, with only one in the Bay Area: a Lebanese restaurant in Santa Rosa. Foodie Crowd Funding also appears to have just one Northern California project: a winery in Sonoma Valley. Fun-dit has no active campaigns.

Because access to donors is still the most important part of any crowdfunded project, Kickstarter remains the most used of all the sites. The most popular food projects on Indiegogo have raised just a fraction of what the most popular food projects on Kickstarter have raised.

Some of the most popular Kickstarter food projects nationwide are actually based in the Bay Area. Food tech gadgets are trendy around here, with a San Francisco-based sous-vide cooking machine called the Nomiku raising $586,000 last summer. But, more traditional restaurants have been able to raise large amounts of money as well.

Here are some (but not all) of the most popular food-specific crowdfunded projects.

Forage Kitchen: A co-working food space in the Bay Area for people to use the kitchens, to take classes, to work on project or to put on events raised $156,502 last June. Iso Rabins, the founder of ForageSF, launched the project with rewards like dinners, t-shirts and membership in the co-working kitchen. Since the funding, he’s been looking for a space.

Omnivore Salt: A company to make organic salt, mixed with spices, from a family recipe raised $141,467 earlier in September (far more than its $30,000 goal).

Shakewell: Launched by former Top Chef contestants Jennifer Biesty and Tim Nugent, Shakewell Bar and Kitchen hopes to open in Oakland. In August, the duo raised $102,937.

Myriad Gastro Pub: From Trish Tracey, who has worked at and opened Thirsty Bear Brewing Co. and Momo’s, Myriad Gastro Pub will be a gastropub in SOMA. In May, the project raised $63,165.

Charles Chocolates: When Chuck Siegel decided to re-open Charles Chocolates in the Mission, he raised $53,073 last summer. He now operates a retail shop and chocolate kitchen near 16th — and you can learn how to make chocolate truffles.

While these projects have raised more money than most crowdfunded campaigns, plenty of food projects only need a few thousand dollars. Right now, if you visit a crowd-funding site, you’ll see a wealth of food trucks looking for money. Sheshunoff said food trucks are about half their projects, because they have both a hard time getting funding and they need less capital.

Over 22,000 independent restaurants launch every year. That means there’ll be lots of money needed — and plenty of it will come from crowds.

What Are the Most Popular Crowdfunded Food Projects? 11 October,2013Kelly O'Mara

  • sweatpants

    It’s interesting to see al this in one place. It is even more intriguing that Iso Rabins doesn’t have a place yet, having closed over a year ago (June, 2012) and one of the rewards being co-working space (for $1000!). Also, Omnivore Salt is not misrepresenting their product, seasoned salt, but you should know “organic salt” is not a thing. Additionally, as a person who lives on Lakeshore in Oakland, I don’t believe Shakewell has opened, let alone let on which space they are taking over.

    • You’re right. Shakewell hasn’t opened yet. I mixed up a different new restaurant over there with the Shakewell Kickstarter end date. I’ll fix that.

  • There is another new Crowdfunding platform exclusive for food projects.
    However, the difference is http://www.RestaurantFunder.NET will allow both
    equity and reward funding, therefore you can also invest $10,000+ and
    walk away with part ownership.


Kelly O'Mara

Kelly O’Mara is a writer and reporter in the San Francisco Bay Area. She writes about food, health, sports, travel, business and California news. Her work has appeared on KQED, online for Outside Magazine, epsnW, VICE and in Competitor Magazine, among others. Follow Kelly on Twitter @kellydomara.

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