Home stretch for The Westy, including a different kind of crowdfunding

(WSB photo: The Westy’s bar takes shape)
By Tracy Record
West Seattle Blog editor

It’s become almost routine for new enterprises to do some crowdfunding – asking friends, family, online supporters to chip in to help cover startup costs. The Westy Sports and Spirits, under construction at 7908 35th SW in Westwood, is joining that crowd – but not via the usual donation drive.

The Westy has just become the 15th area enterprise to launch a drive via Community Sourced Capital – which you might call crowd-loaning instead of crowdfunding. And unlike the major donation-type crowdfunding sites, CSC is based in Seattle (see who else it’s worked with).

After hearing about The Westy’s campaign on Thursday, we returned to the under-construction space Friday afternoon to check in with its proprietors.

When we spoke with Paul Ritums, JP Vidican, and Shane Whittall last August, they had hoped to open their sports bar/restaurant before 2013 was over, but as seems to happen with the majority of new businesses requiring buildout, it’s just taking longer. They’re excited to have all their permits and licenses now – liquor license included.

Opening The Westy is NOT contingent on raising this money, its owners stress. But the extras it would make possible will make the space even nicer than they have planned, if it comes through, with added touches including more indoor brick. Community Sourced Capital is an all-or-nothing campaign, so they’ve set levels starting at $20,000, and they’re already as of this writing about a quarter of the way there. If the community buys in, The Westy will be “that much better,” says Ritums. He and his business partners say West Seattle is all about local, small business, it’s the perfect fit.

As they continue putting together The Westy’s interior, the bar has taken shape as centerpiece of the 35th-fronting downstairs (top photo looks westward toward the front door). Reclaimed wooden beams from Snohomish County are being put into service for its top – some are still waiting to be finished and added, like the one shown off here by Paul:

Behind the bar, two repurposed doors await installation as the sliding gateway to the private dining area in the back.

The concrete floor and exposed wood beams overhead – all previously hidden and now uncovered, as noted in our previous report – will be part of an industrial-style interior, including metal tables. The block wall on the north side will be painted for some warmth. Not only are they repurposing materials and buying as many recycled components as they can, they also have recycled what they can’t use, like concrete that was broken up as they reshaped the space.

Aside from the decision to seek community microloans, the plan hasn’t changed. Eighteen screens, three sound zones; a grand staircase down to the bar area, from the dining areas behind it. They’re hoping they have a few months of work left, at most – depending on the outcome of some extra electrical work they just discovered the need for – until they can open. And in the shorter run, the CSC campaign: “People are interested in feeling like they’re a part of getting a small business off the ground.”

You can find out about it, and participate in it if you choose to, by going here and “buying a square” to start. “It’s a loan, not with interest – you put $50 in, you’ll get $50 out,” says Ritums. “And it’ll be fully used.”

If they have reached at least $20,000 by the end of the month, their dream will have those extra features. They’re confident it will. And by the way, if you find yourself in the area, they’re keeping the door open while working, as often as they can – join the neighbors who have poked their heads in to say hi, see what’s up, and see a dream take shape.

Clems January 4, 2014 (10:43 am)

Fantastic! Great to see another addition to that neighborhood. Hope they reach their goal!

WS gal January 4, 2014 (10:56 am)

They are a for profit sports bar business asking for funding help ? I’d rather give money to real change

WSB January 4, 2014 (12:30 pm)

They are not asking for anyone to “give” money. As noted several times in the story, this isn’t a donation campaign – it’s different from Kickstarter et al, it’s microloans. Many if not most businesses borrow money and/or seek investors at some point. But they’re not twisting anyone’s arm, and in fact they didn’t even contact us to seek publicity – I saw this mentioned on their Facebook page and thought it was interesting. – TR

a January 4, 2014 (12:41 pm)

ws gal- try actually reading the article before you make comments. Also, you would rather give money to a homeless person who defecates on the property of our local supermarkets? Not I, no thanks

Silly Goose January 4, 2014 (12:54 pm)

WOW very cool textiles, love love love the doors, I will be checking this establishement out just to look a the interior finishes!!

Yo January 4, 2014 (1:03 pm)

It’s a microloan with no interest, yes? With the possibility of default? What kind of due diligence does CSC provide? CSC has a listed staff of 8, are they all volunteers? Do they get any revenue from these interest-free loans?

CSC’s web site is vague on these details.

I don’t mean to sound like a negative Nelly…I’m just curious. I’m also sad that we have to have microloans in this country. Didn’t this financing tool originate in the 3rd world to help (very) small enterprises start, in places where poverty is endemic?

coffee January 4, 2014 (1:22 pm)

This is a great idea. WS Gal, since you most likely do not have experience with a small business and attempting to get funding, I can tell you from tons of experience, almost no banks will talk to start ups and even more so if you do not have a huge chunk of equity in something. I think this will work, however, I am still disappointed that they have chosen this space to be 21 and over at all times. At least this is what I remember from the earlier story. This area needs a family establishment badly. Why can it not be 21 after 9 pm for example???

DarkHawke January 4, 2014 (1:34 pm)

@WS Gal: Most if not all Kickstarter drives are for regular profit-driven companies, too. You get a premium of some nature for your comparatively small “investment,” in lieu of something like stock or a bond.

coffee January 4, 2014 (2:16 pm)

BTW, I did buy a tile….

WSB January 4, 2014 (2:34 pm)

Some good questions are asked here, which is always awesome because it teaches me about the additional information I should have/could have sought/provided. I did find one expandable box on the CSC website with this explanation. It was on the sidebar in this feature about a cranberry company in Long Beach w/which CSC worked:

We approve loan requests from businesses with at least a year of proven revenue in their books.

Borrowers pay back loans using a preset percentage of revenue instead of a flat monthly payment. As such, the payment timelines could change if revenues accelerate or decelerate. We send monthly reports to Squareholder so they know how much has been repaid, but we never disclose how much revenue the business produced.

At the end of the day, this revenue-based financing is healthy for small businesses with seasonal revenue or projected growth.

In the case of Starvation Alley Farms, we calculated the repayment schedule for this loan using one year of proven revenue and projected growth. The full loan is estimated to be repaid as early as 36 months from the time of issuance and as late as 48 months, depending on how much is raised for the business.

If you have extra questions, please don’t hesitate to send us an email at support@communitysourcedcapital.com. We’re still learning exactly what community funders want to know about these kind of loans, so your straight-forward input is very much appreciated.

Another expandable box on the sidebar says CSC “aggregates small zero-interest loans (not donations) and turns them into one big loan for a business. We call those small loans Squares and the lenders Squareholders.”
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As this story was more an update on The Westy than an up-close look at CSC, I have not spoken to the folks there; might be a good sidebar next week depending on how crazy things get, or don’t, in the news stream otherwise. Regarding businesspeople with a track record, while I didn’t re-mention it in this story because it links back to our previous coverage, the Westy team’s background includes Shane having been a founder of Locol next door. In the CSC list of who they have worked with so far, you’ll see Stockbox Grocers, which ran its test mini-store in West Seattle a few years back, then opened a fixed location in South Park that has served that community through its trying, bridgeless times, and now also has a First Hill spot. http://www.communitysourcedcapital.com/stockbox.
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Just a couple data points.

Jason January 4, 2014 (3:37 pm)

Faith, folks. You need to have it in your neighbors to engage in something like this. I’m sure there is no guarantee, so yes there’s some risk. Since there is no interest being made, the idea is that you contribute because you want to.
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The reason I’ll contribute is: After all the development that is going on here lately, it’s great to see another small business going up in an existing space instead of another corrugated metal apartment building. Also, anytime we have a business employing people in West Seattle, there’s just that much less relying on the bridge, the C line, etc.
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The ROI here is in the overall strength of our community.

Westy S&S January 4, 2014 (9:11 pm)

Thank you WSB for the article and all of the clarification as to what we are trying to do and how Community Sourced Capital works. As always your coverage is great!

WS Girl, we know that this campaign may seem a bit out of the ordinary. But we are not asking for handouts, we just decided it was great way to seek a loan for the business that would actually involve the community that we are a part of. As stated in the article, at the end of the day we will still be able to open as we have already secured the majority of our capital as any other small business would. This loan will just add those additional special touches and make things a little easier for us to open the doors.

Yo, you are correct, those who choose to support the campaign are buying a small piece of a larger loan. There is no interest being paid through this campaign, but just like any other financial undertaking with a loan we are on the hook whether we are successful as a business or not. CSC makes no money off of the individuals that choose to participate as a squareholder. There is a campaign fee that we maintain, but beyond that there is nothing sneaky going on in the background.

Coffee, Jason, and everyone else that chooses to support our campaign…Thank You for believing in us and supporting small businesses!

Heatherp January 5, 2014 (2:20 pm)

Being able to Help neighbors/friends bring something new to the community is great. It’s a tremendous amount of effort that goes into opening a new establishment, if giving $50 eases a little stress then it’s the least I can do. Especially to a place I want to go- AND at the very least my husband to go to watch sports and free up the tv for my oprah:)