8 Ways to Find Restaurant Investors
By following these 8 tips, you will be able to find restaurant investors and grow your food business.
How to Find Restaurant Investors
1. Ask friends and family
Friends and family should be the first people you approach because they are the most likely people to say yes. They already know you personally. They want to help you accomplish your goals.
Keep in mind, however, that things can go wrong. Make sure everyone understands that investing in a restaurant, or anything for that matter, is risky. Make sure they understand that they can lose their entire investment. Repeat this a few times if necessary.
When things go south, your relationships with friends and family may suffer. Some people may even sever ties. By being upfront about the risks, you decrease the chance of this happening.
2. Utilize your extended network
Now that you have your friends and family on board, it’s time to go bigger. Ask members of your inner circle to introduce you to their friends and family. The same process applies. Pitch them your idea and make sure they understand the risks.
3. Befriend wealthy individuals
You need money to invest. That is a simple fact. Therefore, as someone who is trying to raise money for a restaurant, you should meet as many wealthy individuals as you can.
Don’t just talk to people with deep pockets at investor conferences and other formal settings. You should also try to interact with as many wealthy individuals as you can in your day-to-day life.
For example, the country club is a great place to make new connections if you enjoy playing golf. You can also try art museums. Engage in small talk. Casually mention that you are looking for restaurant investors. See if they or anyone they know would be interested.
4. Join restaurant incubators
Restaurant incubators are support programs that aspiring restaurateurs can join to break into the food industry. Incubators are financially structured in two possible ways. Some incubators charge participants a program fee. Others invest money into the food startup in exchange for equity and a claim on future earnings.
Restaurant incubator participants are taught how to use commercial kitchen equipment. This education is necessary for folks who only have experience cooking from home. People need to make the most of their time in a commercial kitchen since rental charges are by the hour.
In addition, restaurant incubator participants are taught general business concepts, such as accounting and marketing. They are also taught how to navigate the various regulatory hurdles within the food industry.
5. Look for angel investors
Angel investors are wealthy individuals who invest their own money into innovative startups. They are often business leaders. They pursued entrepreneurship and made a fortune. Now, they want to grow their wealth even further by investing in others.
Restaurateurs can find angel investors using LinkedIn. They can filter LinkedIn members by industry and education. People can also simply type the words “angel investor” into the LinkedIn search bar.
Restaurateurs should research the backgrounds of their potential investors before reaching out. See if any of them have invested in restaurants before. You don’t just want a cash infusion into your business. You want a strategic partner. This means that the investor can give advice and help you open doors. The right investor will have a Rolodex of contacts in the restaurant industry.
6. Consider venture capital
Venture capitalists and angel investors have similar job descriptions. They both invest in innovative startups. The main difference is that venture capitalists are not lone actors. They are part of a larger company. Venture capital companies are funded by their own group of investors. These investors may include university endowments and pension funds.
Restaurateurs should look for a company that can add value to their business in addition to a check. Research deals that they have done in the past. Make sure everyone has the same mission.
7. Use social media
Besides privately messaging investors, restaurateurs should also publicly announce on social media that they are looking for investors. Let the investors come to them. In the post, briefly describe how the restaurant concept will be unique. Include images of sample dishes if possible. Tell interested investors to comment.
Nowadays, most people are on social media. This includes well-known investors and entrepreneurs. You might be surprised. Someone influential might reach out to you.
8. Use Email
Email is still an important communication tool in the business world. This is how you can reach investors who you have not been able to reach before. You can look up email addresses by browsing company websites and directories.
In your email, briefly talk about yourself and the restaurant concept. Keep the email short. No one likes to read a long block of text, especially in the initial email. Click send and wait a few days.
Some people will respond. Others will not. If they don’t respond, send a follow-up email. Some people might have missed the first email. However, if they also ignore the follow-up email, then it is time to move forward.