Don't get the founders of Mission Cheese talking about cheese, or maybe do. The conversation quickly shifts beyond my knowledge of cheddars and blues into local varietals like Bleating Heart Cheese's Fat Bottom Girl, proper cheese-wrapping techniques and how to choose a spirit cheese.
For these three founders: Sarah Dvorak, Oliver Dameron and Eric Miller, it is all about introducing customers to over 300 of America's lesser-known cheese varietals and supporting these craft cheese makers. Diners at Mission Cheese are invited to choose between a California, Midwest, Eastern or Monger's Choice cheese flight, each featuring a rotating cast. From its founding in 2011, Mission Cheese (MC) has defied the typical restauranteur's first-timer odds and flourished with revenue up each of the last four years. But, co-founder Oliver Dameron told us, "We've literally maxed out in terms of offerings in the space."
Despite a desire to increase offerings beyond the flights, pressed sandwiches and house-made charcuterie, the team is at the limits of what the 650-square-foot space in San Francisco's Mission District can offer. "We're doing $1,300 per square foot here, and the best fast-casual restaurant numbers are closer to $700 per square foot," Dameron elaborated.
So, it's time for a new space.
While this team could run circles around Old McDonald when it comes to cheese knowledge, co-founder Sarah Dvorak's background in merchandizing and inventory management and Dameron's MBA in Sustainable Management are what keep this place in the black. This isn't your typical group of artisanal pickle purveyors. Dvorak's seat on the California Artisan Cheese Guild's Board of Directors, Dameron's Certified Cicerone (aka beer sommelier) certificate and co-founder Eric Miller's miracle-work with charcuterie mean that this team knows damn well how to curate and deliver only those options that will delight their guests and keep inventory flowing.
Their next venture, Makers Common (MC2) will be like Mission Cheese but grander, with a bigger footprint, larger menu and a small retail space to sell cut-to-order cheeses and other curated products. You might wonder how the market can bear another fancy cafe, but their unique value proposition -- a restaurant that serves delicious food based on local ingredients, is casual and comfortable yet beautifully designed, has everyday prices, focuses on the connection to producers, is open for lunch and dinner and is friendly to families -- represents the be-all end-all of what I look for in a weeknight restaurant, and it's damn hard to find in even the most walkable neighborhood.
Makers Common isn't being funded with a traditional bank loan or equity investment. The team has offered up a $600,000 Direct Public Offering (DPO), which is basically a crowdfunding campaign on steroids. Instead of kicking in $50 for a T-shirt, which, let's face it, most supporters probably don't need, community members can give Makers Common a loan in the $1,000 to $25,000 range and receive a guaranteed return of 4 percent per year (3 percent in cash, 1 percent in MC gift cards) and their principal back in 7 years.
When asked why they decided to use a DPO instead of more traditional means, Dameron explained: "There isn't a financing mechanism that shares our [local community] values and principals." The MC trio wants to create a community of 200 to 300 founders who really care about the business. While the founders will get a good return on their investment and great perks like founders-only events, they'll also get important intangibles. Dameron explained the genuine connection he feels to these supporters: "I'm really serious about the joy that our investors/crowdfunders in Mission Cheese get when they come in and feel that sense of ownership, whether they invested $25,000 or donated $20. They feel a return on their investment/donation, and I know it because I see it."
From a purely financial point of view, a guaranteed return of anything above 1 percent is pretty great. My local bank has a sign in the window offering CDs at 1.25 percent, which seems amazingly bad given that they lock your money up for 5 years. Of course, those CDs are secured, and this investment isn't FDIC insured. That doesn't mean it's totally Wild West -- the MC folks spent seven months going back and forth with California's Department of Business Oversight to create an offering that is now state approved.
But let's not kid ourselves about the lack of risk. What the group has managed to build at Mission Cheese is extremely impressive, especially given that the start-up capital for the original MC came from a family member's home equity loan and a last-minute crowdfunding campaign to raise $12,000 when construction costs came in higher than the bid. These folks know how to make good use out of a buck, and I have full confidence in their abilities to turn a small amount of start-up capital into a flourishing cafe. However, the restaurant market is fickle. Put the best team on the planet together and things can still go wrong for reasons beyond anyone's control.
I put Dameron through the ringer explaining the risk side of things to be, because in my heart I wanted to support MC2, but the chances of my hard-earned money disappearing seemed just a bit too close for comfort. He was happy to oblige:
"On risk, you could argue that there is less financial risk in the stock market, as few of those companies go out of business. But what is never measured adequately, and almost never taken into financial account, are the economic (and social/environmental) externalities of these companies being in business. How many people lost their homes during the recession due to criminal activity by major lending institutions?
"For the most part, people interested in community investments like this one also care about the health of that community and its economy. In other words, it's not just about comparing returns and risk side by side. Community investing creates an economic resilience, a defense again the unpredictable crowd psychology (sometimes lunacy) of macroeconomic policy."
I'm probably not the wisest advocate for you to listen to when it comes to risk management since I make my living in the crazy world of online media, but in full disclosure I wanted to let you know I chose to invest in Makers Common. It's a risk for sure, but one way or another, we'll be eating our way to the bank, which is something you can't say for a CD.
To hear more about Makers Common and the opportunity to invest click here or join the team TONIGHT at Mission Cheese to drink some wine and learn more. Want to RSVP? Can't make it tonight but want to hear about future events? email email@example.com
Jen Boynton is the former Editor-in-Chief of TriplePundit. She has an MBA in Sustainable Management from the Presidio Graduate School and has helped organizations including SAP, PwC and Fair Trade USA with their sustainability communications messaging. She is based in San Diego, California. When she's not at work, she volunteers as a CASA (court appointed special advocate) for children in the foster care system. She enjoys losing fights with toddlers and eating toast scraps. She lives with her family in sunny San Diego.
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