Is Venture Capital Right For Your Restaurant?
Sep 17, 2020
Investments early on can jumpstart some concepts, but is it the ideal path to growth for your restaurant and especially during these troubling times?
Many restaurant owners realize that using your own money or family and friend’s money can only do so much to fund aggressive growth. Because opening and operating a restaurant is expensive, countless restaurant owners have made the mistake of spending all their money finding a fantastic location and opening a beautiful space, but then they don’t have the sales to keep up with their expenses.
Venture capital is a form of private equity provided by investors to startups and emerging companies with high-growth potential. In exchange, the investor receives equity (ownership) in the company.
Sounds great, right?
Sometimes it is.
Typically, venture capital funds are willing to gamble on pre-revenue companies with a strong idea in sectors like technology. But with restaurants, investors have traditionally demanded a track record of success before writing checks making things a bit tricky for some.
Venture capital comes with a price, though. Founders must be willing to reduce their ownership stake, which can result in reduced control over strategic decisions. Venture capital is also relatively scarce. Despite the huge size of investments often covered in the media, the overall amount of venture funding available to new businesses is relatively small.
The good news?
Venture capital is far from an entrepreneur’s only option. In the next few weeks, we will discuss other solutions when your restaurant needs capital!
Ready to transform your restaurant's finances? Whether you need Monthly Bookkeeping, a Catch-up Bookkeeping service, or want to embark on our DIY Bookkeeping Course, we've got you covered. Have questions or need more information? Don't hesitate to reach out. Let's talk about how we can support your business. Schedule your FREE 15-Minute Call today and let's get started on your path to stress-free bookkeeping!
