EQUITYEATS

It's time someone set the record straight about restaurant investments. We're here to do just that. Sign up for updates.

[equityeats-blog]

EquityEats makes investing fun and simple

I don't know anything about investing. How do I know this will be money well spent?  

The investment process can be daunting and risky, but if done correctly, it can also be extremely rewarding. The great news is you don't have to go through the process alone. EquityEats manages all investments to ensure that both parties — investors and entrepreneurs — have mutually beneficial arrangements.

Our crowdfunding platform for restaurants, bakeries and coffee shops, allows anyone to be a part of restaurant investing's new frontier: equity-based crowdfunding. This concept allows investors to invest money in exchange for small pieces of ownership of the concept you are investing. So people can give between $100 to $1,000 and get a return if the enterprise makes a profit — regardless of their income level. The only rule is that investors need to be residents of the District of Columbia (sorry Marylanders and Virginians!).

Now that you’re reading to pull up a seat to the table, there are three things you should know before you make your first investment.

1. Do your homework

Before jumping into any business, research the venture. Assessing your own motives and financial status, along with the restaurant's concept and business plan, will lead to an educated decision. Remember, investing in new businesses can be risky — only invest what you are comfortable with losing.  

2. Now, relax

An investor’s success is directly related to the success of the business they help fund — they benefit when the business succeeds. EquityEats will send out quarterly updates from the business, which maintains an important transparency throughout the process. Investors can promote the restaurant, coffee shop or bakery themselves on social media and word of mouth, but EquityEats takes care of the rest.

3. Enjoy those perks

In addition to equity, investors have the option to receive perks based on the investment levels. These perks are clearly promoted and are accessible before to making your investment — so be sure to read carefully. Sample perks depend greatly on the venture, but include tickets to the opening party, percentage off a restaurant bill or a free coffee each week.

Investing can be scary, but with EquityEats’ vetted concepts, structured deals and awesome perks, it doesn’t have to be. Interested in putting your money where your mouth is? Visit equityeats.com to browse investments and learn more.

Become an EquityEats “investomer.”

[equityeats-blog]

We Love Food Truck-trpreneurs

This Sunday, EquityEats will participate in the Capital City Food Truck Convention at One Eight Distilling here in Washington DC. The DMV Food Truck Association, a tenacious and valuable organization led by Che Ruddell-Tabisola. We are thrilled to be asked to participate in a panel on giving chef-entrepreneurs access capital in a number of different ways, including equity-based crowdfunding.

What is exciting about food truck owners is that they embody the ways the food and beverage industry is evolving with new technology and changing consumer demands. The influx of food trucks in the past several years has been paired with the proliferation of commercial kitchen spaces like Union Kitchen and Mess Hall here in DC and inspired an ever-expanding role for social media in gaining traction and driving sales. Because of these developments, many aspiring chefs who might have traditionally waited to open a brick-and-mortar restaurant see the “food truck route” as the most expedient way to vet their concepts and build their brands. 

Like food trucks and shared commercial kitchens/communities, equity crowdfunding is transforming the way the food and beverage industry does business, by bringing everyday guests “to the table” as chef-entrepreneurs’ investors and best customers (”investomers”).

And ask any food truck owner: Success does not come easily. It doesn’t in the restaurant business either, which is why we love working with experienced chefs and operators. Food trucks’ success is dependent on a variety of factors (that I’m sure we will hear more about on Sunday), including a hard-fought location to set up for the day, a distinct and active social media presence, and product/service that stands out compared to hundreds of other competitors. Although restaurants face similar challenges, the best food truck operators recognize the value of analyzing data about their guests and their sales.

EquityEats enjoys working with dedicated chef-entrepreneurs who not only make the best food and have the most passionate spirit but also the flexibility, the creativity, and the humility to build great businesses for their neighborhoods and cities.  

We look forward to meeting all of the DMV area’s best “food truck-trpreneurs” this Sunday!

Learn More about How EquityEats Helps Food Entrepreneurs

[equityeats-blog]

Opening a Restaurant? You Need Investomers

A typical restaurant relying on investors to open would have 1-10 investors. Investors had to be accredited investors, meaning they make $200,000 annually ($300,000 for married couples) or have a net worth exceeding $1M (not including primary household residence). These investors could provide value to the restaurant, but they could not solve one of the biggest challenges facing restaurants: Finding loyal, engaged customers.

EquityEats changes that.

We attract hundreds of “investomers” (investors + customers) to both raise capital but also to become your best and most loyal customers.  Unlike in the past, investors no longer have to be an accredited investors in order to to buy equity in a startup business. 

Our process of opening restaurants contrasts the current process: Most restaurants open with only a handful of high-dollar investors (who can’t command the same impact on the business’s bottom line like hundreds of engaged people) or because of a large, personally-guaranteed loan (payments for which can limit restauranteurs financially).

How do we do it?

EquityEats facilitates what is known as equity-based crowdfunding. We are curating restaurant projects that would appeal to our investors in states that allow equity crowdfunding. (What’s equity crowdfunding?)  We are currently facilitating investment opportunities in Washington, D.C. (after seeing significant success), but we are vetting concepts across the country as we explore other markets.

We have seen that those most engaged in restaurant crowdfunding are self-identified foodies, regardless of how much they invest.  Opening restaurants with the support of 300-500 investomers sets you up for success from day one. Not only does this group of local people express interest in a restauranteur’s concept, but also they provide tremendous value as loyal guests for the life of the restaurant. 

Isn’t this going to be a headache for chefs?

We help manage investors’ expectations, and you as the business owner sets the terms for any special investor perks or access. EquityEats also handles the logistics of paying out distributions, so you can focus on what you want to focus on: Running a great food and beverage business.

This is a win-win for restauranteurs. Local people validate your innovative concept with their hard-earned money, and they will become irreplaceable brand evangelists and loyal regulars.

Crowdfunding embodies wisdom of the crowd. At EquityEats, that is one smart crowd. But we need dedicated, talented entrepreneurs like you who will be doing the hard work of transforming communities with vision.

Join us: Tell Us about Your New Concept

Home

[equityeats-blog]

EquityEats Restaurants Welcome ‘Investomers’

You eat locally. You shop locally. Why wouldn’t you invest locally?

You can become a restaurant investor for as little as $100. Unlike in the past, you no longer have to be an accredited investor to participate in what is known as equity-based crowdfunding. EquityEats provides access to investment opportunities in states that allow equity crowdfunding. (What’s equity crowdfunding?)

A typical restaurant relying on investors to open would have 1-10 investors. Investors had to be accredited investors, meaning they make $200,000 annually ($300,000 for married couples) or have a net worth exceeding $1M (not including primary household residence). These investors could provide value to the restaurant, but they could not solve one of the biggest challenges facing restaurants: Finding loyal, engaged customers.

EquityEats changes that. 

We have seen that those most engaged in restaurant crowdfunding are self-identified foodies, regardless of how much they invest.  Opening restaurants with the support of 300-500 investomers (investors + customers) sets entrepreneurs up for success from day one. Not only does this group of local people express interest in a restauranteur’s concept, but also they provide tremendous value as loyal guests for the life of the restaurant.

Our process of opening restaurants contrasts the current process: Most restaurants open with only a handful of high-dollar investors (who can’t command the same impact on the business’s bottom line like hundreds of engaged people) or because of a large, personally-guaranteed loan (payments for which can limit restauranteurs financially).

We believe investomers make the best customers. You’re the regulars restauranteurs want to find when they open, and they’re the type of business leaders you want to see bringing vibrant new ideas to your city or neighborhood. 

Crowdfunding embodies wisdom of the crowd. At EquityEats, that is one smart crowd.

Join us: Sign Up to Beccome an Investomer

Home

[equityeats-blog]

Protecting Investors in Equity Crowdfunding Deals

A key differentiating factor for investors who invest through EquityEats rather than directly in a food and beverage business is that we establish agreements between our entrepreneurs and investors that benefit and protect both parties. While investment opportunities will range in concept, location and execution, EquityEats opportunities will typically share the following characteristics, aimed at protecting investors’ interests in each investment opportunity. 

Coaching Board The three largest investors obtained through EquityEats will have the right to nominate a representative to sit on the Coaching Board of the restaurant along with two representatives of the entrepreneurial team. This Coaching Board approves the release of funds for the build-out of the concept (the raise amount is given incrementally to act as a protection against fraud and misuse) and to approve any capital expenditure above $10,000 (excluding business inventory) once the restaurant is open. The Coaching Board is not there to tie entrepreneurs’ hands but rather act as an accountability measure to help strengthen the business relationship between the entrepreneurial team and community of investors. 

Generous Financial Buffer to Avoid Undercapitalization Undercapitalization is one of the main reasons a food and beverage service business can get into difficulty. At EquityEats, we work with entrepreneurs to determine how much it will cost them to open their concept and then add 20% to this number as a contingency fund (which can always be returned to equity-holders if it is not used). We then add an amount equal to 3 months working capital for the concept to ensure they have the resources to weather any storms. The total figure is the amount we require that an entrepreneur raises. If they cannot raise the full amount, they do not receive any funding. 

Open Communication and Accountability Entrepreneurs raising with EquityEats have agreed to give EquityEats access to their data once open. This enables EquityEats to provide investors with quarterly updates on how the restaurant is doing. Entrepreneurs are able to communicate easily with investors via the communication portal on EquityEats.com, which acts as a centralize mechanism for updating and engaging investors. EquityEats seeks to foster a culture of community between entrepreneurs and investors. 

EquityEats Stays Involved After the Raise It is in our interest as a crowdfunding platform to ensure restaurants fundraising on EquityEats are successful. We stay involved after raising the money to try and support the entrepreneurial team as much as we can. We help with reporting to investors and other optional services that are especially helpful for first-time entrepreneurs. 

Entrepreneurs Incentivized to Pay Investors Back EquityEats structures the deals so that investors receive a majority of the distributions until they have received an amount equal to their initial investment, after which point the distributions are shared out pro rata based on everyone’s equity stake. As the entrepreneurial teams will hold a majority of the equity stake, this structure incentivizes them to pay investors back as soon as possible.

[equityeats-blog]

Know Your Investment Strategy (and Other Tips for First-Time Investors)

All-access equity crowdfunding, now allowed in 15 states, allows all residents to invest in startup businesses for equity. As we saw with Prequel, our first successful fundraising campaign in DC, many investors using equity crowdfunding are first-time investors or more novice investors. People who might never have thought of themselves as investors can now own a piece of a new restaurant for as little as $100, blurring the line between everyday foodie and engaged investor. 

Especially for those new to making investments, here are a few tips for evaluating investment opportunities on EquityEats and beyond:

Know Your Investment Strategy Before making an investment, it is important to consider why you are making that investment. Will you need the option to pull out your money with little notice? How much appetite for risk do you have - could you afford to lose the entire amount you are investing if the project doesn’t work out?It is important to spread your money across different types of investments. As EquityEats investments are illiquid and risky, you should balance your investments through EquityEats with safer, more liquid opportunities. 

Do Your Research and Ask Questions Spend sufficient time reading through an investment opportunity’s concept, financials and legal documents to understand their business. Look at things like how much experience management have in the food and beverage industry, if they have been successful in the past and whether the company has a viable concept. What percentage of the company is being sold, does this place too high a value on the company? If you are not too familiar with the food and beverage industry, perhaps run the investment opportunity passed a friend who does have familiarity with the industry to see if they think it would be a wise investment. Always consult your professional advisers before making an investment. 

Understand the Risks Involved Investments in new businesses are risky. Only invest an amount you can afford to lose in its entirety and don’t use funds that might be needed for other purposes such as college education, retirement or medical expenses.

Evaluating Your Return on Investment The offerings on EquityEats are structured to give investors a preferred distribution of the profits. However, this requires that the company is profitable. It may take a while for a company to become profitable or it might not ever become profitable. Study the company’s projections for a return. Do they seem reasonable and achievable?

[equityeats-blog]

Investors: What’s Equity Crowdfunding?

Crowdfunding is a method of raising money for a project or venture through contributions from a large number of people. Most crowdfunding takes place over the internet as this is a great tool for reaching as many people as possible. Entrepreneurs can raise money on crowdfunding platforms,which host project ideas from many entrepreneurs and handle the collection of the funds. 

EquityEats is what is known as an equity-based crowdfunding platform, and we are the first equity crowdfunding platform focused on investments in the food and beverage service industry. Equitycrowdfunding is one of four main types of crowdfunding that have transformed industries and startups across the world. 

Many Types of Crowdfunding

To understand how EquityEats is different to platforms like Kickstarter and Indiegogo (who facilitate perks-based crowdfunding raises), it is helpful to understand different types of crowdfunding: 

• Perks-Based Crowdfunding (Rewards-Based): In exchange for their money contribution, individuals receive a perk/reward, ranging from a simple thank you email to a pre-order of a product or discounted service 

• Lending-Based Crowdfunding (Debt-Based): Individuals loan money to others with competitive interest rates. For the borrower, interest rates are often favorable to a standard loan 

• Donation-Based Crowdfunding: The contributing individual does not receive anything in return for their donation, this is typically used for charitable causes 

• Equity-Based Crowdfunding (EquityEats’s method of crowdfunding): Individuals invest money in exchange for small pieces of ownership in the private entity raising funds 

Why for Equity?

EquityEats is best suited for equity-based crowdfunding for a couple of key reasons. Entrepreneurs will need to raise a significant amount of capital in order to launch brick-and-mortar startups, and it is unlikely they can raise this amount of money through perks-based crowdfunding (most campaigns on the leading perks-based site raise less than $10,000) or donation-based crowdfunding. Perks are a fantastic way to get people engaged in a project though, so at EquityEats we actually supplement the equity stakes with exclusive, attractive perks for you to use and enjoy at the restaurant. 

One of the benefits of equity crowdfunding is not having to make regular, set payments. If an operator faces an unexpected circumstance (such as a snowstorm) they can hold back on paying investors until they have their cash flow back on track. Debt-based crowdfunding would not give operators this flexibility. 

EquityEats Investors Given Equity and VIP Access

At EquityEats, entrepreneurs raise money by selling off a stake in their business which, based on their financial projections, is anticipated to give investors a certain level of return on their investment. To sweeten the deal for investors and to encourage them to frequent the business with groups of people, all investment opportunities on EquityEats come with perks to use at the establishment. These range from free food and drink, to priority service and cooking classes. 

With EquityEats, you can really enjoy your investment and do it in a way that supports local, independent businesses that help build and grow your community. A thriving restaurant scene can be instrumental in making a walkable neighborhood and play a part in increasing property prices. 

Read more:

Tips for First-Time Investors

How EquityEats Protects Investors

[equityeats-blog]

Why Equity Crowdfunding for Restaurants, Not Just All Businesses?

The food and beverage industry is perfect for equity crowdfunding. All of the investment opportunities on EquityEats are for food and beverage service industry businesses such as restaurants, bars, bakeries, coffee shops, and other brick-and-mortar concepts. 

Restaurants and Bars Benefit Having Lots of Engaged, Local Investors

Restaurants and bars succeed when they capture the imagination and support of the community. By equity crowdfunding, a food entrepreneur can gain this support from engaged local people who have a strong desire to invest in profitable, independently-owned businesses that help strengthen or revitalize their neighborhood. Restaurants and bars thrive on word-of-mouth marketing and on having crowded tables. (How many times have you picked between two restaurants on the basis that one has lots of people in it whereas the other is pretty empty?) Equity crowdfunding ensures this will always be the case by providing entrepreneurs with a large number of people who have a vested interest in making sure the restaurant or bar is being talked about and is always busy - encouraging their friends, family and co-workers to visit. 

Startups in the Industry Require Significant Capital

Brick-and-mortar startup capital needs are often in the hundreds of thousands, and it is hard to raise that kind of capital by offering rewards for what amount to donations. While there are a handful of exceptions where restaurants raised capital on a rewards-based crowdfunding platform, EquityEats helps entrepreneurs raise the capital they need by helping attract investors who purchase an equity stake in the new business. Startup companies in other industries with similar levels of needed capital have already seen success with equity crowdfunding campaigns. 

Well-Run Restaurants Can Be Great Investments 

If executed correctly, restaurants and bars can make for great investments. EquityEats structures deals so that they are fair to both entrepreneurs and investors, leading to a lasting and mutually-beneficial relationship. We provide support to entrepreneurs to help mitigate against some of the pitfalls of running a restaurant to better position entrepreneurs for success for them and their investors. 

They are Tangible Investments that We Help You Understand

If you invest in a restaurant it is right there, a block or two away from your home. You can go in, see what your money has helped create and be proud that you correctly saw potential in the entrepreneur. You might have an idea of what would make for a good restaurant or bar concept, after all, everyone loves going out for a bite to eat or a drink (47% of money spent on food in the U.S. is spent in restaurants), but determining whether that concept would make for a good financial investment is another matter. By just focusing on the food and beverage service industry, EquityEats is able to tailor all of the information available on our website to educational materials and metrics specifically applicable to this industry, so you can understand the financial projections of an investment opportunity and make an informed decision as to whether to invest.

[equityeats-blog]

Prequel Crowdfunding Successful with Backing of 325 District Residents

Prequel LLC, the first company to gain approval by the DC Department of Securities, Insurance, and Banking to facilitate investment-based (equity) crowdfunding in the District, has achieved its ambitious fundraising goal of $200,000 in less than a month, with 325 DC residents each investing as little as $100 and as much as $10,000. Prequel reports that their over 300 investors represent all four quadrants of the city and range in age from 18-70 years old.  The average Prequel investor age is 37 years old.

Prequel is a five-story, 17,000-sq-ft restaurant pop-up “multiplex” opening at 918 F Street NW this spring. The brainchild of DC-based EquityEats, Prequel is a first-of-its-kind culinary experience, hosting up to five restaurant pop-up concepts at one time, with over a hundred concepts expected to occupy the space in the next couple of years. Prequel will bring together the city’s most talented and promising chef-entrepreneurs under one roof and allow guests to experience exclusive previews of new restaurants chefs hope to bring to the District. No other city in the country has a restaurant pop-up project of this magnitude, setting DC apart from foodie havens San Francisco and New York.

Prequel stands as one of the largest (if not the largest) amount of money raised for a single campaign under an intrastate crowdfunding exemption in the country, with $200,000 in less than a month. Prequel also attracted the highest number of DC residents as investors in a single equity crowdfunding offering, with 325 District residents bringing Prequel to life with their investments.

Prequel’s success further cements DC’s prominence nationally as an active, early adopter of equity crowdfunding. Only 15 states and DC have passed intrastate exemptions to allow this form of raising capital in advance of the SEC’s rules governing Title III of the JOBS Act. A key motivation for the DC government to approve equity crowdfunding in October 2014 was to create jobs in the District, and with the successful completion of its campaign, Prequel is doing just that. The team is hiring for all positions, from management and service staff to kitchen and dish staff -- on schedule for a spring opening.

Join EquityEats.com to learn about future investment opportunities in D.C., and beyond.

Home

[equityeats-blog]

Visit Original Link

EquityEats CEO Johann Moonesinghe recently sat down with DC's RealEverdayBusiness podcast hosted by Brandon Shapiro. Johann and Brandon talk about a variety of things, from EquityEats's origin and what Johann learned from his first restaurant investment to reasons restaurants fail and the unique appeal of D.C. growing food and beverage industry.

[equityeats-blog]

Why has hardly anyone applied for equity crowdfunding in D.C.?

The first crowdfunding application, which was approved last Wednesday, allows District-based EquityEats to raise $200,000 for an entertainment and dining venue in Penn Quarter that will host five different restaurant concepts on a rotating basis. The eatery, called Prequel, is slated to open this spring.

[equityeats-blog]

I like to think of it as, if you're willing to pay $100 for dinner and you like your dinner, you're probably willing to invest $100 or more in that offering.

Steve Lucas, EquityEats VP of strategy and communications, talking about Prequel in the Washington City Paper (February 5, 2015)

[equityeats-blog]

You Can Now Invest In D.C.’s First “Pop-Up Megaplex”

New D.C. regulations allow anyone to participate in equity crowdfunding for approved businesses.

[equityeats-blog]

Looking for a restaurant in D.C.? This massive space plans to offer five in one

Created by the executives behind EquityEats, the venue will feature multiple dining concepts each month

[equityeats-blog]

Making Profitable and Fun Investments

Restaurants and bars succeed when they capture the imagination and support of the community. By equity crowdfunding their restaurants, food and beverage entrepreneurs can attract support from engaged local people. An ideal investor would be someone who wants to invest in profitable, independently-owned businesses, which can strengthen and revitalize neighborhood. Restaurants and bars thrive on word-of-mouth marketing and on having crowded tables. What better way to launch a business than with a group of engaged investors who helped open your doors?

As an investor, restaurants are a great financial investment when run well (as EquityEats restaurants are), and unlike most investments, restaurants are tangible investments. Your investment isn't a stock you track on your iPhone each day -- it's a living, breathing business thriving in your neighborhood, that you can visit for a beer or a meal. You can see what your money helped build.  You enjoy the perks of being someone who saw and invested in strong potential.

[equityeats-blog]

"Guests at Albright Special should feel as friends and family do when they gather together to cook a meal—conversation is flowing, recipes are exchanged, and experiences are shared."

[equityeats-blog]

Ross Perkins of Foodable TV interviews EquityEats CEO Johann Moonesinghe about the burgeoning #restaurant #tech scene -- and how EE plans to play a key role.