Nova Scotia restaurants are still turning to crowdfunding. But is it always the best move?
Campaigns can raise lots of money, but also risk backlash, public scrutiny
When Katie Tower and the all-female ownership team behind Fawn Restaurant decided to reach out to the public for financial support to stay afloat, it wasn't something they considered lightly.
The restaurant, which opened in the fall of 2022 on South Park Street in Halifax, N.S., was a big leap in size and scope from Field Guide, a small food and cocktail bar in the city's north end that was an already existing venture for some of the group.
Fawn served modern American-style cuisine with French and Italian influences, and aimed to be a mix between casual and fine dining. But by the end of 2024, the business was struggling.
Tower said they were still trying to pay off debt accumulated during the restaurant's buildout, which ended up costing double the amount they expected.
As a last-ditch effort, the owners created a crowdfunding campaign to encourage people to purchase gift cards to help with cash-flow issues. They called it the Fawn'tum Leap.
"When we did end up launching it just before Christmas, we basically didn't really have any other [option]," said Tower. "It just felt like … well, we have to turn over every possible stone."
Privately, the initiative was a success, at least in the short term. Tower said Fawn raised about $65,000 from patrons who answered the call to buy gift cards.
But publicly, the owners received substantial pushback on social media, with some alleging they were asking for a handout and others criticizing the optics of a fine-dining business pleading for financial support in an uncertain economic climate.
Even with the support, the business didn't hang on for long. It closed for good in April.
Once again, there was another round of online chatter, with some accusing the owners of misusing the funds.
Lost in the criticism, however, was the fact that the gift cards remain valid at Field Guide going forward.
"It was one of my first experiences with that type of tall poppy thing, where the higher your head sticks out of the bushes, the more likely it is that people are going to notice and have something to say," said Tower.
The response illustrates some of the perils of crowdfunding. It can help a business get off the ground, or stay afloat, but it can also open up individuals to online attacks and public scrutiny.
Larry's opening this week
In the past decade or so, a number of Nova Scotia businesses have tried crowdfunding, including The Narrows, The Black Sheep and Glitter Bean Cafe in Halifax, The Canteen in Dartmouth, and Schoolhouse Gluten-Free Gourmet in Western Shore.
This week, Larry's Sandwiches & Sides is celebrating its first week in business on Portland Street in Dartmouth.
After a successful series of pop-ups in 2024, the owners, including head chef Jason McKenzie, launched a Kickstarter campaign last November to help fund the opening of a permanent space.
Backers were encouraged to pledge a certain amount of money, in exchange for rewards, which ranged from having their name listed on a support wall, to dinner for two at sister restaurant Dear Friend, or 10 sandwiches for $120.
The campaign was a success, raising $27,628 off 147 backers to exceed its $25,000 goal.
For McKenzie, who has long dreamed of owning his own restaurant, turning to crowdfunding was a way to engage his community and gauge support before turning to another bank loan.
"I would rather we owe sandwiches to our friends and neighbours than interest to a bank," he said.
Crowdfunding is a risk for any business, but McKenzie said he wasn't worried about a negative response.
"I understand that feeling people get about crowdfunding and Kickstarters where they feel like they're just giving money to a business for nothing and that's something I specifically really thought about when we were making the goals, so that it was a reward … a thank you for supporting us early."
Still not the norm for Nova Scotia restaurants
According to Natasha Chestnut, the executive director of the Restaurant Association of Nova Scotia, a group that advocates for those in the industry, crowdfunding is still not especially common in the province.
Chestnut said it's important for small businesses to weigh the pros and cons before making a choice to crowdfund.
She said it can be an effective way to avoid bank loans, or to drum up marketing for your business, but there is a potential downside to being held accountable by the public instead of a creditor.
"Your reputation is on the line," she said. "Especially if your expected goals are not met and it's not successful."
For her part, Tower says she understands why Larry's and other restaurants have made use of Kickstarter to drum up support for their ventures.
But she does feel Fawn faced greater scrutiny than many of these ventures, something she thinks has been heightened by the fact that it was owned by three women.
"It seems to me they just didn't like that we were bold enough and brave enough to ask for help, and that's a reflection of the person, not of the rightness or wrongness of what we were doing."
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