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Last Update: Monday October 23, 2017

Key Idea: Take Dozens of Investors

It took the SBA plus 48 investors along with every penny Chef Keller had to make this perfect little dish. More...

Key Question:

A: 

Find an expert.  With the help of his attorney, a broke Thomas Keller put together a sophisticated financial package.

Q: Where did the money come from?
 
A: First he borrowed money against his own credit cards. Second, he put his plan in writing in such detail that the attorney trusted Thomas to make what he had written about happen. Third, a bank was willing to finance the property and on top of that, the SBA backed an additional loan for operating funds. And fourth, he convinced 48 separate investors to join him on the the venture.

Q: Since most businesses are launched with less than $10,000 why did Thomas need four cash sources?

A: Mainly because he was buying real estate but also because his experience had taught him that a startup needs plenty of cash. In fact, there is usually never enough. In the first year, even with servicing all of the debt, he was able to eke out a $6 profit. Yes. Six dollars. That was a victory for Thomas and he took it as a sign that he would succeed in Yountville.

Q:  Why so many investors?

A: This was intentional. Thomas told us he didn't want to take a large amount from any one person for two reasons. First, if he failed no one person would lose too much. And second, Thomas didn't want to have to coddle a single large investor. This is time consuming and draining. We think this is brilliant.

Q: Do you have to use an attorney to help raise money from investors?

A:
No, but if you take money from an investor, you should have an attorney structure the deal. Borrowing from family or getting a loan from a bank doesn't require you to have your own attorney, but if you do seek investors, use an attorney.

Q: Is Thomas Keller a salesman?

A: Yes and no. He said, "I wanted it so bad that I made it happen." This means that, even though he doesn't consider himself a salesman and he doesn't enjoy asking people for money, he did it anyway to make his dream come true. So, he had to be a salesman to achieve his goal.

Think about it

What could you do with a large injection of cash? Is it time to take on investors? Is it time to buy your own building?

Clip from: The French Laundry with Chef Thomas Keller

Yountville, Napa Valley, California: He took a little-known restaurant in a little town and turned it into one of the most famous places in the world.  Le Monde said (paraphrased), "Can it be possible that the best French restaurant is not  in France but ...California?" 

Visit The French Laundry and the man who made it come to life, Chef Thomas Keller.  He now also owns Per Se in New York City, and Bouchon in Yountville and in Las Vegas.  To accomplish this growth, he has recruited, hired and trained some of the best chefs and service people in the country.

Writer Irvine Welsh had this to say about dining at The French Laundry,  "...I salivate now as I think of the Truffle-pickled Hen Eggs with 'its creamy yellow' and Chopped Black Truffles.  ...obviously, the title of 'best restaurant in the world' is subjective to the point of lunacy. Having said that, I doubt it would be possible for The French Laundry to be equaled.

...Thomas Keller is a true giant among chefs, coming over as a genuinely inspirational figure, and to see him in action in his kitchen is pure joy."

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French Laundry

Thomas Keller, Owner

6640 Washington Street
Yountville, CA 94599
707.944.2380

Visit our web site: http://www.frenchlaundry.com/

Office: 707.944.2380

Business Classification:
Restaurant

Year Founded:

Take Dozens of Investors

THOMAS: Forty-eight investors. My philosophy there was to have a lot of investors investing a small amount of money.

HATTIE: So no one would if...

THOMAS: Right. No one would lose a lot if the business...

HATTIE: OK.

THOMAS: ...went to failure, and no one could tell me what to do.

HATTIE: And that's working?

THOMAS: That's working very well.

HATTIE: Now, are they getting some...

THOMAS: And they're all very proud of it, and they get a lot of satisfaction out of being one of the owners of The French Laundry. Our first year, which was really only six months because we go--our fiscal year is also the calendar year, so our first year was six months. We opened in July, we finished out in December. We lost money the first six months.

HATTIE: Of course.

THOMAS: And then the first year--our first full year, we broke even. I think we made $6.

HATTIE: I love it. `We made $6.'

THOMAS: Six dollars. We all worked extremely hard, and we made $6. And then our second full year, we really started to realize what the restaurant could do, and we started distributing money....to the investors. And we became pretty solvent after our first year and a half.

HATTIE: And you wanted the experience more than a bunch of money. THOMAS: Yeah, the money part of it, from the beginning of this project, was never the most important part of doing it.

HATTIE: I mean, you want to make a living.

THOMAS: Well, I had to be responsible to my partners. I had to be responsible to the bank. I had to be responsible to the SBA. I had to be responsible to my employees. But it's not what drives us. It's not what drives my cooks, it's not what drives the people that work in this restaurant. What drives us is the fact that we are able to do something that's gonna make a difference for us in our lives, and because it makes a difference for us in our lives, it's going to make a difference for the people who come to our restaurant.
 
 

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