EquityEats acts as crowd-funder, bookkeeper, and even real estate broker for new D.C. restaurants

Johann Moonesinghe knew he and his EquityEats co-founders had gotten in deep when they found themselves sitting in various coffee shops around the city, counting the number of lattes and other items purchased by customers.

The new online restaurant funding platform, which seeks investments from accredited investors looking to put money into food and beverage, needed a baseline for what volume to expect for a concept they were raising funds for, Bluebird Bakery.

But none of the partners — Moonesinghe, Andrew Harris, Patrick Vacca, Jason Pinto and Stephen Lucas — had any experience in the bakery and coffee business. So they went to count customers at D.C. coffee shops.

“I’m sure they thought it was weird that we were listening to every interaction between the customers at the counter,” Moonesinghe admitted.

The latte tally is indicative of EquityEats‘ approach as it begins soliciting investors for four restaurant concepts aiming to open in D.C. Originally conceived as an equity crowdfunding platform that would let anyone buy a share in the region’s hottest new craft-cocktail bar or biscuit shop, EquityEats has morphed into a funding mechanism for accredited investors — for now, at least — that also deploys its business acumen to help the restaurants it works with succeed.

EquityEats will serve as bookkeeper for all of the restaurants it successfully funds. They’ve also written software that will be installed on each restaurant’s point-of-sale systems that monitors transactions and feeds analytics back to the restaurant’s owners.

“These are things that really big companies use to keep track of costs, but that smaller, independent restaurants might not have the know-how to do, or it might be cost-prohibitive to do on their own,” Moonesinghe said.

The group even helped with leasing for Bluebird Bakery, helping negotiate rental rates and tenant improvement dollars from the landlord. (The exact location of Bluebird’s space wasn’t disclosed because the lease is still not final, Moonesinghe said, but it’s near 11th Street and Rhode Island Avenue NW.)

All of these moves are aimed on making sure investors in these EquityEats-endorsed concepts get the best return possible. It also ensures EquityEats’ own profitability: the platform’s model is predicated on earning 20 percent of the profit that goes back to investors after the original investments are repaid.

With plans to eventually help fund thousands of restaurants — starting in D.C., then spreading to San Francisco next, and possibly to New York or Atlanta — “we believe we’re going to do really well as a company,” Moonesinghe said.

Moonesinghe, who began his career in tech startups, started thinking about launching EquityEats after successfully investing in Black Whiskey, the 14th Street bar and event venue, as well as a bar in Los Angeles. He is also investing personally in all four of the current offerings from EquityEats.

Before the platform’s national expansion, there will be another round of investment opportunities launched in the next couple of months. One will be a brewery, another will be Mason Dixie Biscuit Co., the biscuit-focused restaurant that won an investment opportunity with EquityEats through its participation in the recent Mess Hall Launch Pad contest.

EquityEats investments are structured two ways: open for investments or open for pledges. Concepts that are closer to active leases are open for investments; altogether, the platform has raised $132,500 for Bluebird Bakery and Lighthouse, a lobster and burger-centric restaurant that expects to be located near 10th Street and Pennsylvania Avenue NW.

EquityEats forms a separate venture capital fund for each restaurant, and allows up to 100 investors in each offering. They’re projecting about 20 percent annual return for investors.

Eventually, the Securities and Exchange Commission will complete rules surrounding equity crowdfunding from non-accredited investors, allowing EquityEats to fund restaurants the way it originally envisioned: seeking investment from all types of investors.

“We really want 500 investors in each of these locations. We think that’s going to help the community aspect,” Moonesinghe said.

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