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The Radler, Cafe Mustache Look to Crowd Funding for New Ventures

By Victoria Johnson | June 5, 2013 6:53am | Updated on June 5, 2013 8:26am
 Nathan Sears (l.) and Adam Hebert, owners of The Radler, stand in front of a Bohemian beer ad they found behind drywall as they prepared the space for their new project, a Bavarian beer hall and restaurant.
Nathan Sears (l.) and Adam Hebert, owners of The Radler, stand in front of a Bohemian beer ad they found behind drywall as they prepared the space for their new project, a Bavarian beer hall and restaurant.
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DNAInfo/Victoria Johnson

LOGAN SQUARE — Folks in Logan Square are getting used to being trendsetters, so it's no surprise that the neighborhood is center of another recent trend — funding new businesses with Kickstarter.

Crowd funding on Kickstarter is not new, of course. The company, launched in 2009, has helped thousands of upstarts, nonprofits and artists fund their endeavors.

While most campaigns offer donors their product when it's funded or free goodies, Logan Square business owners are counting on residents to donate to benefit the community — not just to get free stuff.

"If we raise that $25,000, what we'll do is take that $25,000 share, and instead of having to give that equity to investors, we take what those kickbacks would be and give them to the community," said Adam Hebert, co-owner of The Radler. "In the long run, it's a savings for us not to have investors, but we want to treat the community the same way."

 Cafe Mustache wants to expand, and turned to Kickstarter for funding.
Cafe Mustache wants to expand, and turned to Kickstarter for funding.
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Cafe Mustache/Kickstarter

The Radler, a "contemporary Bavarian restaurant and beer hall" set to open at 2375 N. Milwaukee Ave. in September, went to Kickstarter hoping to raise $25,000 to help get business up and running with no promise of future kickbacks or dividends — at least not in the traditional sense.

"We've got a whole lot of ideas, but we don't know how much money it's going to be yet and who's going to need it the most," Herbert said, adding that the business needs to be open and profitable before it's decided where to give back.

But will people throw money at a business venture for a Bavarian pretzel and a vague promise of future good will?

Apparently, they will. So far, The Radler has raised more than $12,300 of its $25,000 goal, which — it should be noted — also will go to restore a huge Bohemian beer ad that workers uncovered on one of The Radler's walls. Donors also will get their names on a community mural.

Just down the street, Cafe Mustache is working on its own Kickstarter campaign. The popular spot already has raised more than $4,000 toward an expansion of the coffee shop, which opened in 2010.

"We funded our original build-out from loans from family and friends, and we sort of tried to avoid traditional bank loans," said owner Kerry Ann Couch. "Then someone recommend Kickstarter."

While Cafe Mustache is also offering various gifts for donors, such as T-shirts and "fancy costume mustache[s]," the promise for the community is a little different.

"One of the primary reasons we want to do it is to have a better space for the events that we present," said Couch. "We provide a space for a very specific sort of community use."

People frequently go to Cafe Mustache to play music or show their art, Couch said.

"We have newer musicians, or musicians trying something new, film students looking for a place to exhibit their work.  We kind of want to create a unique space that's a little bit more intimate and a little less bar-ish," she said.

The cafe serves alcohol but isn't like a traditional bar, Couch said.

DePaul finance professor Patrick Murphy said he had not seen crowd-funding campaigns like The Radler's or Cafe Mustache's, but said if people want to donate to a for-profit business, they should go for it.

"If people want to give to something, part of the market system's foundation is such transactions are voluntary," he said. "So if people choose to donate to that business for any purpose, they're free to do it, and the business is free to ask for it."

Murphy's work is focused on "socially purposeful entrepreneurship," where business owners strive to have a positive impact on their communities.

Even without promises to give money to community organizations, Murphy said just having a business open and thriving might be enough of a positive impact, particularly in blighted areas.

Uncharted Books, for instance, raised more than $12,500 in 2011 to help open its doors, promising little beyond being an independent used bookstore for Logan Square.

"If the donors and the business people and the community members believe that having this business succeed would be good for the community, then that makes sense to me," Murphy said.

Paul Levin, executive director of the Logan Square Chamber of Commerce, said he has encountered plenty of people who want to start a new business but have a hard time getting funding.

"Traditional financial institutions are not terribly interested in dealing with what are perceived as small or micro-users of capital, so there's sort of a vacuum," he said.

Small-business aid groups such as Accion Chicago help fill that vacuum, Levin said, but he said that Kickstarter is a good option as well — as long as the businesses are transparent with their intentions.

"I hope that the people who are contributing know that the pleasure of helping an entrepreneur start a small business is all the rewards they're going to expect," he said.

And maybe a fancy costume mustache.