The Birchwood Café in South Minneapolis is the latest local restaurant to turn to the national Kickstarter website to tap supporters for money.
The Birchwood is seeking $100,000 to help pay for an expansion and remodeling project. The campaign launched last week and wraps up on November 24. As of Tuesday morning, the Birchwood had drawn about $32,000 in pledges from more than 300 backers.
Birchwood Café owner Tracy Singleton told Twin Cities Business that the $100,000 goal on Kickstarter only covers about one-tenth of the project budget, which is nearly $1 million.
“I do have bank financing . . . there’s just a bit of a gap,” Singleton said. “Just the refrigeration and HVAC systems alone are $90,000.”
The chefs behind the critically celebrated Travail restaurant recently turned heads when they raised more than $255,000 through Kickstarter to open a new Travail in Robbinsdale. Travail’s team raised more than three times the $75,000 goal it set for the project.
Singleton said that she’d been planning her own Kickstarter campaign before learning about Travail’s efforts.
Kickstarter, a for-profit, New York-based operation, takes a 5 percent fee for projects that meet funding goals. Backers get various perks based on the amount of money pledged. If a project falls short of its goal, it receives none of the money pledged to the undertaking.
And it appears Travail's success was a bit of an anomaly. According to statistics from Kickstarter’s website, only 19 of the 1,824 successfully funded food projects have raised $100,000 or more. Meanwhile, 2,640 food projects did not meet their funding goals.
Kickstarter’s site notes: “Most successfully funded projects raise less than $10,000, but a growing number have reached six and even seven figures.”
Projects on Kickstarter must fit into one of 13 categories of creative pursuits, including food. The website’s guidelines note: “Kickstarter cannot be used to sell equity or solicit loans.”
Travail is not the only other local restaurant to turn to Kickstarter. Last year, The Lynn on Bryant raised more than $34,000 on Kickstarter to help open the bistro in south Minneapolis.
The Birchwood Café opened in 1995. Singleton said that the restaurant’s annual revenue is $2.25 million and that the business is profitable.
Singleton acknowledged that the Travail campaign kicked up some local debate about whether people should contribute money to for-profit businesses through Kickstarter. But Singleton said many see the Birchwood Café as an asset in the community.
“We have an established track record. We’ve been supporting local farmers for as long as we’ve been open,” Singleton said. “We’re a very community-based business.”
“The financing climate is difficult these days,” Singleton said. “The whole point of this is so we can keep doing what we’ve been doing.”