Sid Feltenstein, the former head of Long John Silvers and A&W (owned by Yorkshire Global) who engineered their sale to Yum! Brands a few years ago, is joining forces with other industry notables to start a venture fund that will invest in small emerging restaurants brands.
Feltenstein, along with Brad Klapper, COO of Nourish Capital will manage the fund. They’ve assembled an advisory board, as well, including: Paul Barron, founder of Fast Casual magazine; Michael Seid of MSA Worldwide, WD Partners’ Dennis Lombardi, and Paul Klapper, Feltenstein’s former partner at LJS and A&W. The fund will focus on brands in the fast casual space to invest venture capital to help grow their businesses.
“There are hundreds and hundreds of restaurant concepts that have five, six, ten stores,” said Feltenstein. “The problem is that the entrepreneur has opened these locations through friends and family and second mortgages. They’ve been scraping money together.” And, he added, they are to the point where these business owners have nowhere else to go for the amount of money they need to take it to the next level.
“It’s too much to borrow from friends and family,” he said, “and not enough for the typical private equity firm. They’re too small.” The fund’s focus will be on investments from $3 million to $5 million to open stores or to launch a franchising program.
The group’s venture fund is still in the fundraising stage, and their goal is to raise $50 million. “What’s different now than 10 or 15 years ago,” added Lombardi, “is that before, it was harder to identify who these concepts were. Now with social media and more comprehensive search, you can do some reasonable research” before contacting them.
For Feltenstein, this is his chance to give back to the industry. “I like to keep busy, and I really love to help young entrepreneurs achieve their dreams,” he said. And for the entrepreneur, they are not just receiving capital to grow, they have at their disposal advice from experts they normally wouldn’t have access to. For more information on the venture fund, contact Brad Klapper at (415) 391-4085, or by e-mail at firstname.lastname@example.org.