East London Restaurant Shuns Crowdfunding, Seeks $4.1 MillionRichard Vines
Two chef friends from St. John and Jamie Oliver’s Fifteen have formed their own company to raise funds for a Michelin-level dining room in East London.
Tom Harris and Jon Rotheram are seeking 2.4 million pounds ($4.1 million) to acquire the freehold of the Marksman pub, where they plan to open a restaurant above the bar and add hotel rooms over that. They are raising money through the U.K. government’s Enterprise Investment Scheme and putting in 100,000 pounds of their own.
East London, traditionally a working-class area, has in recent years become a fashionable center for bars and restaurants, including the Clove Club, which opened last year with backing from small investors using a crowd-funding website.
“It’s a cracking site and the pub is doing good business,” Harris, 39, said yesterday in a telephone interview. “We’ve raised about half the money so far. We’ve been working at the Michelin level for a long time and we’re not going to dumb down what we do.”
Harris previously worked with Rotheram at St. John Chinatown, which won a Michelin star in 2012. Rotheram went on to become executive head chef at Fifteen, also in East London. They are friends with the team behind Clove Club and decided against crowd funding because of the amount they need to raise.
In contrast, Clove Club raised 250,000 pounds via the Crowdcube crowd-funding website. Individuals could put in as little as 1,000 pounds. Benefits, apart from tax relief, included getting 10 percent of their money back each year in free food and drinks at the restaurant.
The business had started as a supper club in a private apartment and then developed into a temporary dining room at the Ten Bells pub in East London.
“We were opening during the downturn and didn’t have a proven track record as restaurateurs,” said co-founder Daniel Willis, 33. “The banks weren’t lending and this way you start a business without debt.
‘‘OK, you are indebted to the people who have invested in you, but a restaurant is a lifestyle choice and not like a sneaky little Internet startup where people are expecting a massive return. It’s something where a lot are family and friends and big fans of what we do.”
Jonathan Downey, the restaurateur and bar owner who helped put together the financing for Clove Club, is now trying to raise more money for another East End restaurant, Rotorino, which is the project of chef Stevie Parle of Dock Kitchen.
“We’re using Crowdcube for 250,000 pounds to repay shareholder loans and to provide additional working capital,” he said. “You have a lot of people who can put a little bit in. They want to support chefs in a new restaurant and they also become ambassadors for the business.
‘‘Look at Clove Club: Fifty people invested and already it’s one of the best restaurants in the U.K.,’’ said Downey, a former corporate lawyer who has gone on to open restaurants, clubs, hotels and bars.
(Richard Vines is the chief food critic for Bloomberg. Opinions expressed are his own. Follow him on Twitter @richardvines)