His laptop computer in tow, he showed attendees projected food and labor costs as well as projected revenue. Apparently, the audience loved his performance. Attracting investors for your first restaurant can be challenging, but restaurateurs say it gets easier for subsequent operations. This time, investors received equity only, which means no loans to repay. Restaurateurs tend to prefer that investors provide equity instead of debt, says Saltz.
Straight equity makes more sense.
The restaurateur doesn't need the obligation to pay interest. Saltz also advises that rookie restaurateurs seek several investors to contribute smaller amounts, rather than struggling to find one or two major investors. Family, friends, accountants and attorneys often can help introduce you to potential investors, he says. Established restaurants might also go to an investment bank for help in getting equity. Ideally, you'll structure the business so that you retain control even if others have equity, says Saltz.