Why Should I Pay for Your Restaurant?

In an age where every coffee shop has a tip jar, it’s no surprise that food entrepreneurs are now asking us to chip in to literally construct their restaurants.

The crowd-funding website, Kickstarter, is driving this trend and it drives me crazy. I’m happy to make a donation to your non-profit fundraiser, or even help you record an album that I suspect will never make a dime, but the idea of me giving away my hard-earned cash so you can build a profitable restaurant seems ludicrous.

On Kickstarter, project creators set their fundraising goal, and if they meet it, they get the money. If not, the “investors” get their money back. I use quotes because you’re really just a donor who sometimes receives an incentive or reward.

The new Buttered Tin bakery in St. Paul reached its $10,000 goal in about three weeks. Those who paid $100 received a dozen cupcakes and an invitation to an exclusive donor open house. I assumed that most Kickstarter patrons were friends or family of the project creators, but Jennifer Lueck, a Buttered Tin co-owner, says that they actually had a large number of strangers donate.

Still, the bulk of the bakery’s start-up funds are, indeed, coming from loans. “There’s no way we could raise enough money to open our bakery through Kickstarter alone,” Lueck admits. But the crowd-funded route provides one brilliant benefit that a bank loan can’t match: “We are funding a marketing campaign, plain and simple,” she says. If people donate $10 or $20 or $50 to a place that isn’t even open,“every time they think about where to go, they’re going to go to that place.”

Dangerous Man Brewing Company didn’t use the Kickstarter platform, but rather raised money from a large pool of friends and relatives in a similar manner, with a similar purpose. The difference is that Dangerous Man investors receive an ownership stake and dividend checks at the end of the year, as long as there are profits. “Having 70 investors gave us a loyal base of customers who are invested and want to see this business succeed,” says owner Rob Miller. In my experience, it seems to be working. A friend of mine invested and then introduced me and my family to the brewery.

Alas, an appetite for donating doesn’t always translate to an appetite for the product: the Kickstarter-funded Donut Cooperative in Seward closed in a year.

I wish the Kickstarters well, but if I’m going to invest, I want a piece of the action, not just a plate of cupcakes.

Jason Derusha is a morning anchor at WCCO-TV. Have a dining mystery you want Jason to solve? E-mail him at DeRushaEats@gmail.com

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