Once restaurants and bars open, it’s ultimately down to local customers to determine whether or not they succeed by voting with their patronage. Now a new platform could enable customers to help make that choice before businesses even build their kitchens. Equity Eats is a restaurant crowdfunding platform which helps eateries to raise capital via their potential customers and enables local people to have a say in the development of their area.
EquityEats enables entrepreneurs, with viable business plans, to raise funds for their hospitality venture by crowdfunding the start-up capital in exchange for future equity. Investors are primarily local community members, meaning their support in itself is proof of concept. As with other crowdfunding platforms businesses have to raise the full amount needed to proceed. Investors receive a majority of the restaurants profits until their initial investment has been returned and then receive a quarterly distribution. Businesses can also offer perks such as invites to opening parties, food tabs and reservation priorities. EquityEats takes a 1 percent management fee from profits, but only once all investments have been paid back.
We have also seen customers investing in their favorite independent food establishments by purchasing Credibles — local food credits. Are there other local businesses which could be financed by the community in this way?