I believe that the restaurant business fundamentally is NOT a Angel Fund/Venture Capital friendly business. Why?
Angels Investors and VCs seem to like businesses that can create a product/solution/offering using the initial money they invest, that can then be scaled at a rate that is positively disproportional to any additional capital investment. For a restaurant business, even if your first unit is very successful, to grow, you would need a lot of capital again and again. If "x" is the investment for the first unit, to grow revenues by 100 times, you would need an investment of 100x (probably more if you need more money towards marketing/branding). VCs like businesses where if they invest “x” initially to create a product, then to grow revenues by 100x, they would probably need to invest 10x/20x, primarily towards sales, marketing and customer support.
Having said this, there are quite a few restaurant businesses in India which have received VC funding so far. Plus with the market expected to grow significantly in the next few years, VCs may start getting more interested. As the examples below illustrate, it seems to be easier to get first round funding once you have a successful brand rather than getting angel funding.
1. Yo China (www.yo-china.com) – Matrix Partners (www.matrixpartners.in) - 25 Crores in 2006
2. Kaati Zone (www.kaatizone.com) – Erasmic Ventures (www.erasmic.com), Accel Partners (www.accel.com) and Draper Investment (www.draperco.com) – Interesting interview with Kiran Nadkarni, Founder & CEO of Kaatizone (http://bangalore.citizenmatters.in/blogs/show_entry/141-interview-kiran). Exact investment not known, but my guess would be about 10-15 Crores.
3. Mast Kalandar (www.mastkalandar.com) – Footprint (www.footprintventures.com), Salarpuria Group (www.salarpuriagroup.biz) and Helion Ventures (www.helionvc.com). They received 2 rounds of funding – about 4 Crores in 2008 and about 40 Crores by Helion in late 2010.
4. Brand Calculus - Booster Juice and Kiwi@Kiss Frozen Yogurt (www.brandcalculus.com) – 16 Crores in 2009 from Helion Partners (www.helionvc.com).
5. Cocoberry (www.cocoberry.co.in) – Ajay Relan of CX Partners (www.cxpartners.in) – 9 Crores in 2011.
I am not including large Private Equity investments that Café Coffee Day, Encore Hotels (Rajdhani) and certain other large brands may have received.
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ReplyDeleteGrand Kebab Kurries is operating out of Rajpur road Dehradun as a take away for vegetarian and non- vegetarian food lovers .
ReplyDeleteAfter successfully running our business for 6 month we now planed to expand our chain and hence we are planing to open a new
fine dining restaurant by the same brand name .
For further detials visit us on facebook.
http://www.facebook.com/GrandKebabsAndKurres
or call : 9258011555 & 9997894233 .
Its going be a 45 - 50 cover restaurant .
1st year 6k will be break even for per day . we are expecting bare minimum 25k sale per day .
To this purpose we are looking for a like minded investor who share with us a common passion for Food And Beverage business .
The Deal
I am looking a active or sleeping partner for my business .
Actively involve partner will get 30 % of profit margin .( Investment of 1500000 )
sleeping partner will get 25% of profit margin .( Investment of 1500000 )
Thank You ,
Regards .
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ReplyDeleteThere square measure variety of issues that require to be created before you look for capital for your business. Small Business Administration loans square measure alternatives to victimization angel investors as they're way more cost-effective than equity capital. Most business plans that square measure associated with raising capital usually square measure forty to fifty pages long, and you need to develop this document once you square measure considering angel investment.
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