How much could one expect to receive from a venture capital company for a restaurant concept going national?

independent restaurant company in Atlanta...wishing to go regional...maybe national....venture capital firm interested...they want to know how much money we need....what's the most we should ask for....the minimum?
How much could one expect to receive from a venture capital company for a restaurant concept going national?
You should ask for what you need. There's no way someone on here can estimate that for you, even if they have been involved in growing a chain before. Every business is different and involves different costs in growing.





Start by determining your goals for growth. How many restaurants do you want to build up front? What is your exit plan from the venture capitalists? What additional management systems, managers, professional services, corporate facilities will you need to expand your business? What will they cost?





Just like it was a single unit you were planning, multi-unit growth requires a business plan. Working through the financial portion of your business plan will help you determine what is necessary.





I'm curious to know if the name of your restaurant is "Simple Simon", as there is already a pizza concepts operating under this name that is currently in several states. If so, you need to do some research to see who was using the name first, whether your plans include going into the same market as this business, and what you need to do to avoid copyright and trademark infringements.





Brandon O'Dell


O'Dell Consulting


Restaurant/Retail/Bars


bodell1@cox.net


(316) 361-0675


http://www.bodellconsulting.com





Free initial consultations
Reply:Bodellconsulting gave you a good answer. I'm just going to add that your -ability- to identify your needs, resources, expansion expenses, etc. will tell the venture capital company if you're ready to go national. Venture capital firms are all different from each other and offer more, or less, actual input into the operation of your business as it expands. Some will want to protect their investment by having some say in your choices and decisions. Others will be very 'hands off' and let you run the show.





The more the venture capital company invests in your company (money, expertise, resources, effort, time, etc.) the more they will expect in return. Be very aware of how the deal gets structured. What happens if your business isn't doing well? Do the investors step in? Do you lose control? How long do you have before they expect profitability? How long before you do?





Submitting a business plan to venture capitalists is a lot more involved than simply saying "I need $2,000,000." You really have to sit down with a sharp pencil in hand and work the numbers, the scenarios, the size, the scope, your target customers, your competition, locations, etc. You really have to have a plan in place. The plan will tell you how much money you need.





Keep in mind that interest is only that -- 'interest.' Venture capitalists/investors are looking for potentially successful ventures and you have to prove you, and your business, have what it takes to succeed.





If you've ever watched Donald Trump on 'The Apprentice,' you'll see that a group of talented, successful people are competing for the same job. They all had enough "special something" to make it on the show out of hundreds of thousands of applicants. Only 1 person gets the job.





It's the same way with venture capital. The fact that they're interested only means they're considering your business. Just like in your restaurant, it's only partly about what -you- want. If you give your customers what -they- want, your business is more successful. If you understand what the venture capitalists are looking for -- your readiness and capacity for growth -- and can demonstrate it, you'll have a greater chance of winning this opportunity.





If nothing comes of this offer, you haven't wasted your time. Fine tune your presentation and your business plan and submit it to other venture capital or investor groups, if you really want to grow. Don't give up.