It was always something of a misnomer when people would champion the cause of local butchers, bakers and candlestick makers, all the while going to their nearest supermarket for most of their actual shopping.
It’s clear that for local commerce to thrive, it needs not just kind words but loyal and frequent patronage from the communities around them.
Of course, with the rise in crowdfunding, loyalty has taken on a new form, with many projects are drumming up fans and backers even before their products have been developed.
Whilst many of these projects are one off ventures, a recent development highlights how it can also be used to support slightly more sustainable projects.
Equity Eats is a new crowdfunding platform that pledges to offer restaurants a chance to drum up support before they’ve even opened their doors to the first diner.
The concept is a simple one. Restaurateurs can raise capital and support from potential customers, whilst at the same time affording locals the chance to back local commerce (and influence the kind of businesses that operate in their community).
Interestingly, the funds they raise are done in return for an equity stake in the business. Not only are backers providing important funding to the start-up, but they’re also providing a degree of support in the very concept itself.
As is common with crowdfunding, each restaurant has to raise the full quota in order to secure the pledged funds.
Backers will receive a share of the profits, with this changing as the project progresses. In the early stages, for instance, the bulk of the profits will go to investors so that their investment is returned.
After that, investors will receive a smaller quarterly distribution, whilst also being offered the usual crowdfunding perks, such as VIP passes or preferential booking.
It’s an interesting concept to help support local eateries. At the moment, there is only one restaurant available for investment in New York, but hopefully the platform will quickly grow to include a wider range of establishments in more communities around the world.
Check out their promo video below.