For chefs, the hardest part of opening a restaurant is typically coming up with the money to do so. But wannabe-restaurateurs in the Boston area have a new potential resource, reports the Boston Globe: Restaurant Investment Group, a private equity fund intended "to help promising young chefs set out on their own."
Think of it like a restaurant-focused Shark Tank. Restaurant Investment Group's website explains the concept:
The Board of Advisors will vet applications from chefs and then make recommendations to the Restaurant Investment Group’s Investment Committee. The Advisors’ depth of industry experience positions them to help identify the most promising young chefs, the most innovative concepts, and the most thought-out business plans. The new restaurants’ brands will remain with their chefs. The fund mechanism will be opaque to the dining community, so that the buzz around the new restaurant is focused on the chef.
According to the Globe, founder Dan Dain, a Boston-based lawyer, "has raised $1 million, with a goal of raising as much as $3 million to invest in two to four restaurants." So far, four chefs have applied for the money. The board of advisors appointed to help Dain select the worthy chef candidates includes Nancy Cushman, co-chef and owner of O Ya, and Tom First, the co-founder of big beverage company Nantucket Nectars. Investors can buy into the fund for $100,000 per share. However, as the restaurant business is notoriously risky, "There is no guaranteed return."
Could this be the future of restaurant funding? Dain tells Eater that while the initial fund will only invest in Boston-area restaurants "the concept certainly is scalable." He adds,"If the first one is successful, we’d look at setting up new funds in other cities." In the meantime, don't be surprised if you see more Restaurant Investment Group-style funds popping up elsewhere.