Many restaurant operators take on outside financing when opening a new restaurant or expanding an existing concept to another location. Finding restaurant investors can be challenging if you don't know where to look. In this post, we'll discuss how to find restaurant investors to help finance your concept and turn your culinary dream into a reality.
Why work with restaurant investors?
Even if you're lucky enough to have the startup capital or are taking out a small business loan to open your restaurant, you may still want to consider partnering with outside investors. Using your own money or taking on debt involves a lot of personal risk — but when working alongside outside restaurant investors, you distribute that risk and have access to higher operating cash reserves.
On top of offering to finance your business, qualified restaurant investors have the operating and expansion experience, industry credibility, and business savvy to help your restaurant succeed. Especially when you are independent or have a small team, this additional guidance can help you generate sales and streamline operations with less trial and error. Restaurant investors can also be a valuable partner as you navigate publicity, brand partnerships, and more.
7 strategies to find restaurant investors
When looking for investors to finance your restaurant, operators have to pull out all the stops. Some of the following strategies will help you find restaurant investors, while others will help attract investors to you by generating awareness and strengthening your pitch.
1. Leverage your own network
Start the investor search by reaching out to all of your family, friends, and colleagues. Reach out to anyone in your social or professional circles who a) is in a position to make an investment or b) you feel comfortable sharing your restaurant dreams with. These connections — whether it's your culinary instructor, your cousin, or coworkers from non-restaurant jobs — know and trust you and may be more inclined to believe in your ambition and work ethic. Alternatively, if they can't invest in your restaurant themselves, they may know someone else who can.
2. Connect with restaurant operators
Whether or not you currently work in the restaurant world, make an effort to connect with more people in the restaurant industry across all types of positions. Contact restaurant owners who have successfully secured their own investors to see if they'll share learnings from their experience. Join the National Restaurant Association or your state/local restaurant association to attend industry events, make connections, and gain access to other resources that could help your startup journey.
3. Find restaurant investors on LinkedIn
Social media is an obvious professional networking tool, but there are a few strategies to ensure your LinkedIn efforts get noticed. First, complete your LinkedIn profile so potential investors see a professional headshot, a list of your previous industry experiences and education, and a compelling 3-5 sentence summary that highlights your achievements and the mission for your restaurant concept.
Then, use LinkedIn's search filters to find angel investors or venture capital firms who specialize in restaurants. Put together a list of contacts and do your research before reaching out to them. Read articles they've written or shared, find which companies they've worked at, and identify mutual connections — anything to find a common ground that gives them a reason to want to accept your invitation to connect. When you do reach out, don't ask for money or even pitch your restaurant initially — but write a brief, customized message that highlights your shared interests. Once they accept your invitation to connect, send them a brief teaser of your restaurant pitch, describe how this could be a mutually beneficial relationship, and suggest scheduling a meeting to discuss further.
4. Be an active community member
Restaurants are deeply embedded in the fabric of local communities, and their success is driven by neighborhood support. Becoming an active member of the community where you want to open a restaurant will pay dividends in the long term. Some simple ways to become make a positive impact on your community include:
Attending and mingling at local events (e.g., farmers markets, music performances, parades)
Volunteering with local nonprofits that support causes you care about
Shopping at small businesses and restaurants
Taking a class through the community college or other adult education organization (e.g., a course on Spanish or another new language, entrepreneurship, or financial literacy — all topics that will be useful once you're a restaurant owner.
Strengthening connections with local businesses and community leaders now will help when you need to drum up support for your business down the road.
5. Build a digital presence
A professional website will make it easier to conduct outreach and follow up with potential investors, as it helps build credibility and tell your story. This pre-investment (i.e., "coming soon") website should be simple: include a clear description of your restaurant concept's mission and vision, a few high-quality photos of your food, and a brief bio.
Make sure your website is easy to navigate and mobile-friendly — using a website-building platform like Squarespace or Webflow will automatically take care of that. Add a "Be the first to know" message with a subscribe button so you can start building an email list, which will become incredibly important once your restaurant opens. Finally, it takes a long time to grow social media channels, so it's a good idea to create social profiles and add those links to your website to start building a following early.
6. Host a pop-up restaurant
While you might not have the funds to open a brick-and-mortar restaurant yet, try launching a pop-up to generate excitement for your food and vision. Buzz from your pop-up will also help demonstrate that you can build a customer base, which will strengthen your restaurant pitch when talking to potential investors. You'll also get a preview of the permitting and licensing process, which you'll also need to be familiar with as a restaurant operator.
7. Launch a crowdfunding campaign
Once you've done a fair amount of networking and expanded your network, consider launching a crowdfunding campaign to raise capital for your restaurant business. There are a variety of crowdfunding platforms to choose from, but popular ones include Kickstarter, Indiegogo, and Patreon. In exchange for rewards or benefits set by the restaurateur — such as branded merchandise, thank-you notes, or access to early ordering — individuals pledge money to the business idea. Note that some crowdfunding terms require crowdfunders to reach a minimum or a target goal in order to receive all of their funds. A successful crowdfunding campaign also requires a strong marketing campaign to help get the word out — and donations rolling in.
Finding the right investors for your restaurant
While some owners are able to bootstrap their startup costs or secure a business loan, many current or aspiring restaurateurs partner with restaurant investors to secure initial capital. By leveraging your existing network and taking steps to expand brand awareness in your community, you'll increase your chances of finding the right restaurant investors for your business.