Restaurateur Gary Usher has cancelled the Elite Bistros Seedrs crowdfunding drive and will instead be launching a £200,000 Kickstarter next week.
Usher launched the campaign in August, the group's first equity-based crowdfund, which had raised more than £500,000 of the £750,000 target earlier this month.
However, Usher took to social media last night to announce the campaign was cancelled, it "hadn't worked" and investors would be refunded.
Posting on Twitter, he said: "I wanted to offer shares in the business, but it hasn't worked. I've failed at that. Why has it failed? I've just got it wrong. Everything from the valuation at the start to the way that I got involved in the project. My naivety towards it all just hasn't helped. I haven't understood it properly and I've just failed. I feel a bit embarrassed. I do feel embarrassed that it hasn't worked… but I would have always wanted to do it and if I hadn't done it I would have felt regret, so I'll probably take embarrassed over regret. We gave it a go, it hasn't worked."
£120,000 was raised in just the first three hours of the crowdfund, offering 3.61% equity with a share price of £4.17, valuing the company at £20m.
Some of the funds were earmarked for the refurbishment of the group's first pub, the White Horse in Churton, Cheshire. Usher said he would instead seek to raise £200,000 towards the refurbishment via Kickstarter.
He said: "I'm really sorry that I've let everyone down with the Seedrs… [but] I need to react and I need to crack on. So I'm going to stick to what I know – next week I'm going to launch a Kickstarter for £200,000 and with that, if we achieved it, that is what I would use to refurb the pub. So all the plans for B&B bedrooms and stuff we'll have to put on hold. Love to do it in the future but what we have to do first is just get the pub open, which we're all ridiculously excited about, and just carry on."
The winner of last year's Restaurateur of the Year - Independent Catey is no stranger to crowdfunding, having raised £744,796 between 2015 and 2021 (exceeding the set target every time) to grow to six bistros and an events company, all offering approachable, affordable, quality modern bistro food. He now employs 150 people and the business has an annual turnover of £6m.
The business also has plans for a new tapas concept, Joya, and is developing the first floor of Deva House, the Elite Bistro Events headquarters in Chester, for a development and masterclass kitchen.
Elite Bistros' sites include Sticky Walnut in Hoole, Chester, the first solo restaurant for Usher, which opened in 2011; Burnt Truffle in Heswall on the Wirral, which opened in July 2015; Hispi in Didsbury, south Manchester; Wreckfish in Liverpool; Pinion in Prescot; and Kala in Manchester, which opened in 2019. All sites apart from Sticky Walnut were crowdfunded.
"We've been so lucky with the crowdfund on the Kickstarter platform. Essentially, we've been selling products in exchange for money, which has helped us open new places. But every time we've done that, we've had to finance equipment and try to make other deals. We couldn't have done it without the crowdfund because that enabled us to secure finance, but obviously opening a restaurant is a lot more expensive than people might think. So, the next natural progression is to get involved with something like Crowdcube, which is equity-based," Usher told The Caterer earlier this year.