Caroline Morrison and Siobhan Southern are tired of salads. And, they suspect, so are the rest of Raleigh’s vegetarians.
“We wanted somewhere to eat here,” said Southern, a vegan who is pairing up with Morrison to start what they say is Raleigh’s only all-vegetarian restaurant, a hub called “Fiction Kitchen” that will feature dishes such as vegetarian pulled pork and vegan cheese plates while incorporating local produce.
“It’s kind of a risky concept,” Morrison said, but she said she thinks the area is prepared for a meatless dining destination. “People’s eating habits have changed. ... Eating vegetarian for healthy reasons is on the rise.”
The pair, which expects the South Dawson Street restaurant to open right before the New Year, has proof that the community welcomes their idea.
Fiction Kitchen used Kickstarter, a crowd funding website, to raise $37,423 for new kitchen equipment, including an exhaust hood and range that have never come in contact with meat. The restaurant’s campaign, which kicked off Sept. 6, attracted 590 backers and surpassed the owners’ $36,000 goal by their Oct. 13 deadline.
“Not only is it a way to raise money, but it’s also a way for me and Siobhan to gauge whether this is a viable thing,” Morrison said.
Finding funds in Raleigh
Kickstarter, which raises money to finance creative projects, has helped fund more than 30,000 ventures, including more than 65 in Raleigh, and has attracted more than $360 million since its April 2009 launch, according to its website.
Project creators make their own Kickstarter Web pages and set their own fundraising goals and deadlines. Creators only get the raised money if they meet their financial goal by their deadline. Once entrepreneurs start their ventures they keep the proceeds because contributions are not for-profit, according to the site.
If a creator fails to complete a funded project, the crowd funding site isn’t liable. Creators must fulfill rewards they offer to backers who pledge certain amounts of money or they could face legal liability. Fiction Kitchen offered stickers, magnets, T-shirts and other prizes. But Kickstarter’s website says it is up to the creator to find a resolution on funding if a project flops, and suggests that creators could refund the money or explain exactly how the money was used.
Kickstarter takes 5 percent of the money collected, and Amazon Payments, which processes payments, takes another 3 percent to 5 percent in the U.S.
International crowd-funding platform Indiegogo and newcomer SeedInvest also rank among the dozens of crowd-funding sites that provide ways for new businesses to connect with project financing. Kickstarter is the largest.
Such programs cater to small-scale and single-product launches, said Jay Bigelow, director of entrepreneurship at Durham-based Council for Entrepreneurial Development. For Bigelow, who works with projects seeking the larger sums that come from angel investors or grants, the programs can’t help much. Raleigh’s largest successful campaign listed on the website, a book titled “CreatureBox: The Monster Volume,” topped out at $175,620.
But with the Jumpstart Our Business Startups Act, which will allow small businesses and startups to raise funds – subject to overall limits and thresholds on how much individuals can donate – without making them subject to the same Securities and Exchange Commission requirements that large publicly traded companies face, crowd funding could reach new levels.
The JOBS Act passed in April and isn’t expected until guidelines have been created and approved by the SEC and Congress, a process Bigelow expects to take until at least mid-2013. It could mean big things for Triangle entrepreneurs.
The act will allow creators to find backers through funding portals registered with and regulated by the SEC, Bigelow said. And because funding amounts will likely be larger than those seen on Kickstarter and can be directed at larger businesses rather than just smaller projects, they will be able to help larger companies such as the ones he works with.
Also, backers will be able to receive a monetary return on their investment, instead of the gifts that crowd-funding platforms offer.
“I think you can look at Kickstarter and say, this is a good idea for micro-capital raising,” Bigelow said.
Turning dreams into reality
For Bill Hickman, a little bit goes a long way. Hickman is using the $3,345 he raised from 68 backers on Kickstarter to launch his salad dressing product “Bill’s Lemon Tahini,” his twist on a recipe he created while working at Raleigh’s now-closed Rathskeller.
Hickman plans to use the funds for commercial kitchen space and food classes so that he can learn to make the dressing shelf-stable.
“People were getting funded for all sorts of things, and I wanted to get started and see if we could do it,” Hickman said. “When people taste it (the dressing), they remember the Rat.”
And for Southern and Morrison, the funding is helping to make their dream of starting a restaurant complete with new equipment a reality.
The pair have been planning for a restaurant for more than three years. They started serving once-monthly vegan Fiction Kitchen brunches out of The Pinhook in Durham in 2010, partly as a way to test their menu.
After 20 months, they were getting anxious to start their own place. When they found the Dawson street location, they knew they had to go for it.
“We weren’t 100 percent ready for the space,” Morrison said. “I had to go with my gut. It felt good.”
The pair have paid $155,000 of their own money so far on the lease and improvements, they said. But the restaurant with its bar and seating overlooking Raleigh’s shimmer wall will be well worth it, they said.
“This block has the potential of really coming alive again,” Morrison said. “Now the community can say they helped to build this restaurant.”