One more round (at bar, not a VC) to fund startups

A trio of local guys who own a group of bars and grills in Reno are creating a river of nickels that ultimately will give a boost to other entrepreneurs.

But the river of nickels could become a torrent, they say, with help from other businesses that want to spur the creation of new small businesses.

Michael Connolly, Chris Kahl and Zach Cage owners of Legends Grill, Sports & Spirits in south Reno and the Sierra Tap House and the Ole Bridge Pub in downtown Reno are pledging to donate 5 cents from every transaction in their establishments to the creation of a loan fund to help startups and expanding young businesses.

The nickel-per-transaction pledge will extend as well to the trio's newest outpost, The Brewer's Cabinet, scheduled to open soon on Arlington Street.

Connolly says the campaign dubbed the "Reno Rebuild Project" probably will generate $20,000 to $30,000 this year, and the three bar-and-grill owners expect that will be enough to make one loan to a startup in early 2013.

The three founders will participate in decision-making about loans, and Connolly says they are likely to be looking for ideas that wouldn't make it through the front door of a traditional lending institution.

"We want to make sure it's a cool idea," he says.

As loans are repaid with interest into the revolving-loan pool, and as more nickels flow in each year, the project's lending power will increase, Connolly says.

The program could create a bigger splash with more participation from established companies in the area.

"We're hoping other businesses with jump on board," says Connolly. A posting of the project's goals on Facebook (it's at "TheRenoProject") drew dozens of positive responses within hours.

And the organizers have their fingers crossed that the startups that are funded by Reno Rebuild Project in turn will help other startups.

"We're hoping the businesses that we help will pay it forward," Connolly says.

The financial operation of the project is built on a solid foundation.

Cage, Kahl and Connolly floated the idea by their accountant, Jim Pfrommer of Reno, a few months ago, and he asked sharp questions that helped them focus their thoughts.

Equally important, Pfrommer helped the founders of Reno Rebuild Project explore partnerships with third-party organizations that could provide professional management and oversight of the loan fund.

"That would be nice," Connolly says. "We wouldn't need to worry about the paperwork."

Instead of worrying about paperwork, they want to help other entrepreneurs replicate the success that Kahl, Cage and Connolly have found since they purchased Legends Grill, Sports & Spirits six years ago.

"We started as us a small business without any loans from the banks," Connolly says. "It was all friends and family who believed in us."

While a nickel-per-transaction might not seem much like much for a thriving group of businesses, the founders of the Reno Rebuild Project swallowed hard before they made the commitment.

"Sure, $20,000 or $30,000 is a lot of money to us," says Connolly. "But we've decided it's worth it."


Use the comment form below to begin a discussion about this content.

Sign in to comment