How 1898 Café Succeeded With Chinese-Style Crowdfunding

Starting a new café is hard—but getting the right people in the room before you even open the doors? That’s how 1898 Café turned a simple coffee shop into a thriving entrepreneurial hub. Many independent cafés fail because they can’t build a loyal customer base or secure steady funding. But 1898 Café cracked the code by turning its backers into more than just investors—they became partners, promoters, and regulars. So how did a Beijing coffee shop pioneer a crowdfunding model that minimized risk, maximized engagement, and built a self-sustaining community?

In short: 1898 Café recruited 200 carefully selected shareholders who were also founders, professionals, and alumni. Each contributed capital, became a frequent customer, and helped promote the space—blending investment, consumption, and advocacy into one sustainable model. This “triple-role” approach cut risk, ensured early traffic, and created organic word-of-mouth growth.

What Made 1898 Café’s Crowdfunding Model Different?

Most crowdfunding treats supporters as outsiders waiting for a return. 1898 Café flipped the script: shareholders weren’t just putting in money—they were expected to show up, spend money, bring friends, and contribute ideas. This “investor-consumer-ambassador” model unified supply and demand. The café got operating capital upfront and locked in an initial loyal customer base. More importantly, it built internal engagement, increased foot traffic, and reduced early-stage business risks—all without traditional advertising.

As Professor Zhao Hongrui from the Law School at Harbin Institute of Technology noted, this model broke three major barriers in traditional businesses: funds that couldn’t be spent by shareholders, unequal status among investors, and lack of open communication. Here, shareholders were both owners and members, dissolving the usual tension between investors and customers. In short, it marked the start of crowdfunding 2.0 in China.

Building the Right Shareholder Network

1898 Café didn’t accept just anyone. It carefully selected shareholders based on their ability to contribute resources, connections, and energy. The café’s theme was “a home for Peking University entrepreneurs,” so it structured its 200 shareholders for maximum diversity and synergy.

• Fields covered: Finance, mobile internet, new energy, media, education, law, tech, and more—including heavyweights like LAKALA founder Sun Taling, Founder of UIB Wang Pu, BlueFocus Chairman Zhao Wenquan, and JiaMei Dental Chairman Liu Jia.
• Age balance: Around 70% were born in the 1970s—prime for collaboration and mentorship—alongside select 50s, 60s, 80s, and 90s figures.
• Entrepreneurial stage: Shareholders represented various phases of business, ensuring access to startup resources across the board.
• Motivation: All were proactive networkers, business builders, and community participants—not passive investors.

The result? A tight-knit ecosystem where trust, shared goals, and mutual benefit reduced transaction costs and boosted cooperation. In China’s relationship-driven business culture, the high social cost of breaking trust further enforced reliable partnerships.

How Did They Choose Shareholders?

Getting into 1898 Café wasn’t as simple as writing a check. The café used a multi-layered selection process:

1. Internal referral only: New members had to be endorsed by existing shareholders.
2. Core group of 10 initiators: Each recommended 3–5 others, creating a natural vetting network. No single person could invite more than 10 to avoid cliques.
3. 50-founder threshold: Once 50 core backers committed, enough capital was raised to cover rent, renovation, and staffing—then the project moved forward.
4. Executive committee approval: Every applicant had to pass a vote by the cafe’s leadership team, ensuring alignment with the group’s values.

To encourage early commitment, shares were sold in two batches: 30,000 RMB before launch, 50,000 RMB afterward—reflecting the higher risk and effort involved early on. This staged approach rewarded those who believed in the project from the start.

A Unique Two-Tier Café Organization

1898 Café wasn’t run like a typical coffee shop. Its structure had two layers: one for running the venue, the other for serving shareholders.

• Executive layer: Included an elected committee (similar to a board), rotating chair, supervisory body, and professional management team.
• Shareholder services: A dedicated secretariat (with full-time and part-time staff) helped shareholders connect, collaborate, host events, and grow their ventures.

This dual system ensured that while the café was professionally managed, the real focus remained on building shareholder value through resource exchange—not just selling coffee. The goal wasn’t profitability for its own sake, but fostering a dynamic ecosystem where deals, mentorship, and partnerships could flourish.

Keeping the Community Alive

A common problem with membership groups is stagnation. 1898 Café kept energy high with two key strategies:

• Shareholder duty system: Each shareholder had to work one shift per year—serving coffee in the morning, networking in the afternoon, and hosting an event at night. This hands-on involvement boosted pride, visibility, and attendance. Popular hosts even competed for the highest daily revenue.
• Internal innovation hubs: Committees like the Investment & Incubation Commission organized pitch events, workshops, and collaborations. For example, the 1898 Investment Club hosted roadshows that helped raise millions for projects like the animated film Kuiba III.

The café also became an officially recognized innovation hub, winning awards and fostering dozens of deals among shareholders. The trust and frequency of face-to-face interaction translated into real business growth.

Managing Risks the Chinese Way

1898 Café’s model worked within China’s legal framework by:

• Limiting shareholders to 200—a legal threshold for companies under Chinese law.
• Requiring all investors to be personally known, avoiding regulatory issues with public fundraising.
• Not promising financial returns, but guaranteeing the café would stay open for at least three years, allowing shareholders to use their funds through dining and events.

The model emphasized pre-launch risk discussion, transparent finances, and an “exit window” where investors could get a full refund within three months. Regular updates, open accounting, and member-led oversight ensured trust and adaptability.

Why This Is a Model for Chinese Crowdfunding

1898 Café represents a uniquely Chinese approach to crowdfunding—one based on relationships, not anonymous online contributions. Unlike Western platforms that prioritize raising money from strangers, 1898 focused on aligning people, purpose, and resources offline. The core principle? “Money matters, but people matter more.”

Here, crowdfunding isn’t just about capital—it’s about building a trusted circle where time, expertise, networks, and commitment all fuel collective success. As the saying goes: “Those with money invest, those with skill contribute—and together, nothing is impossible.”

Frequently Asked Questions

How many shareholders did 1898 Café have?

1898 Café started with exactly 200 shareholders, carefully selected based on their professional background, industry, and ability to contribute to the community. This number was chosen to balance diversity with manageability.

What was the investment structure for shareholders?

Shareholders could invest 30,000 RMB before the café opened and 50,000 RMB after launch. The increase reflected added value and reduced risk for early contributors. The total capital raised covered startup costs like rent, renovations, and staffing.

Did shareholders get any financial return?

No, 1898 Café did not promise financial returns. Instead, it guaranteed the business would stay open for at least three years, ensuring shareholders could use their investment through food, drinks, and events. The focus was on long-term relationship building, not profit distribution.

How did 1898 Café ensure shareholder participation?

Each shareholder was required to work one shift per year, including serving customers, networking, and hosting an event. This “shareholder duty” system increased engagement, created personal investment, and boosted the café’s visibility.

Was 1898 Café’s model replicated elsewhere?

Yes. The 1898 model has been adapted for projects like the Finance Guests Café, a children’s dental hospital, and even an overseas version in Vancouver—demonstrating its scalability across industries and geographies.

What legal limits affected the crowdfunding approach?

Under Chinese law, a limited company can have no more than 200 shareholders, which capped participation. The model avoided public fundraising to stay within regulatory boundaries, relying instead on a closed, trusted network.

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