I have always been mildly fascinated by the concept of crowdfunding and Kickstarter campaigns. And I suspect that if I really pushed myself for a reason why, it would be for the simple fact that it seems a lot like charity.
There are a million and one business ideas that I have had – some ridiculous, some less so – that I would like to put into practice (Toronto’s first sloth café, anyone?) But that doesn’t mean that I ever come good on any of these marketing models, because a) how on earth would I get all the sloths into Toronto? and b) money and stuff…
In 2016, seemingly nothing is recession-proof. So even if an entrepreneur has that rare, outstanding idea and exceeds their target, it’s no guarantee that investors will ever see hide nor hair of the product or service.
So what exactly does a Calgary-based crowdfunded restaurant have to offer, that won’t elicit side-eye and suspicion?
“It’s like Dragons Den and E*Trade combined. Like Kickstarter, but instead of getting a t-shirt you get equity in the form of shares in a private company. You become a business owner,” says Tom Wach, one of Madison’s partner.
Madison’s 12|12 – named after Madison Square Gardens in New York – is an Inglewood based community restaurant in Calgary, that’s just gone live with their crowdfunding project and hopes to open its doors in July of this year.
According to Wach, who until very recently worked in finance as an investment banker (he quit four weeks ago), this new eatery is making history as the first equity crowdfunded restaurant in Canada.
Quite a mouthful, I agree. But the differentiation is important. Unlike other restaurants in the country that have been crowdfunded by a number of contributors, like The Mule in Hamilton which received $100,000 via Indiegogo, Madison’s 12|12 is not a reward scheme. Instead of thanking contributors with invitations to opening parties, gift cards, and names on the wall of their new restaurant, investors are purchasing shares and will receive a return on their investment.
And unlike restaurants who have tried before them – notably Fonda Lola, in Toronto who ended up in trouble when they tried to issue shares in a second location – this Calgary spot is doing everything above board, via SeedUps Canada.
SeedUps Canada is an online CrowdFinance platform where ordinary individuals and sophisticated investors come together to discover, evaluate, and invest in growing companies. Companies are able to raise capital through a secure platform where they can pitch, attract, and close investors. Investors execute investments online and stay informed of investee companies’ activities. It’s a disruptive model that is changing the way individuals can invest and the way companies can find investment.
So what’s next if the Calgary restaurant achieves their goal?
The crowdfunded Craft Nachos and Craft Salad restaurant will rely heavily on the c-word: community. It’ll be community funded, sourced, staffed, and will provide a community space for young professionals to hang out in. They hope to pay staff – who naturally will be locals – a living wage (before tips) that also includes benefits.
“The food is all stuff that’s been sourced locally, my suppliers are down the road and construction is local with Ryan Murphy Construction, as is the architecture with RAD Architecture.”
“We’re aiming for young entrepreneurs who want something a bit different than high-end Italian food. It’s a place to hang out during the day, a co-working space with outlets, instead of Starbucks. However, the restaurant is designed to be inviting and comfortable for everyone, it’s an extension of people’s space within the community. And the upstairs is an entrepreneurial co-working space,” Wach told Notable.
The restaurant will serve meals at a “happy hour” price tag and offer 12 types of different nachos and 12 types of craft salads. These will include ingredients like blue cheese, specialty meats and cheeses with vegetarian and gluten options, and the nachos will be baked not fried. Interestingly, we can also expect a few dessert nachos on the menu. There will also be affordable craft cocktails and wait for it…$5 beer.
There will be an electronic table ordering system from which to review, order, and interact through social media. Plus it’ll free up staff to chat to patrons.
Having Inglewood as the location has proved extremely important to the success of the scheme, says Wach, who is also Director of Investment at SeedsUp. “It’s a really supportive community with a lot to provide. We got a bunch of support from our local businesses. You fall in love with it, and once you get a taste of it everyone seems to love it. And it’s important to crowdfund because it adds value – we’re part of that community.”
Madison’s 12|12 is currently in the midst of completing their crowdfunding campaign, and have raised 40% of their target in the first week.