A California chef just signed the lease on his first restaurant during a pandemic — here's why he has no doubts.

• Seth Stowaway, a San Francisco-based chef, just signed a lease on his first restaurant two weeks ago.

• Stowaway, a former drug addict who is now clean, said that finding his career path as a chef has helped anchor him.

• He's funding his new venture — Osito, a fine-dining California Tex-Mex restaurant — through investors, a loan from a community bank, and a Kickstarter.

• "My feeling is that people are going to want to do special things," Stowaway told Business Insider. "They're going to want to celebrate, and they're going to want to be together."

Seth Stowaway signed a lease for his first restaurant in San Francisco just two weeks ago. 

While the hospitality industry is still struggling to pay bills and wondering how to reopen, the 36-year-old chef has been meeting with architects, designers and lawyers to open Osito, a live-fire, fine-dining establishment in San Francisco's Dogpatch neighborhood. "It's scary for sure, but you only have one shot to try," he said.

Osito means "little bear." It's Stowaway's kitchen nickname. In addition to having a bear-like physique, the former rocker is covered in tattoos, body art that he acquired after getting sober. On his right hand is a pig, for when he became a butcher. On his left hand is a yellow rose to remind him of his roots — he's from San Antonio, Texas. On his knuckles it reads "seek life," and at the corner of his eye is an anchor, which reminds Stowaway to be present.

This presence comes from being a former drug addict. He's well into his recovery, which includes an active spiritual practice, but the anchor was finding his career path. "If you want to create art in the kitchen, you have to become the chef or else you're just putting out other people's food."

Stowaway has been thinking of opening his own restaurant since 2018, during his time as head chef at Bar Agricole. While many consider this the absolute worst time, Stowaway is hopeful about Osito. "I want to try my hardest one time to make something extremely special," he said. "I feel strongly about this. That's what carrying me through."

In addition to grit, you also need millions to open a fine-dining restaurant in San Francisco. Of the $1.2 million required to launch himself into culinary uncertainty, Stowaway has secured over $800,000, much of it raised this year. 

Asking people for money during the coronavirus is "terrible," he said. "You get told no a lot. Then it gets easier." Actually, what he gets is this: "I'm super stoked. I really want to invest!" And then he's ghosted.

But Stowaway has faith. They're "not the right person," he told me. His investors agreed to 90-10 terms on a three-year payback. If all goes right Stowaway will take 10% of profits, and the remaining 90% will go to investors who will then split profits based on shares purchased at one dollar a share. After the third year, it switches to a 50-50 split.

To pay for equipment — fixtures, tables, a dishwasher — Stowaway was approved for a $250,000 business loan from Main Street Launch, a community bank in Oakland. The one thing he doesn't plan to buy is a giant walk-in refrigerator. "The more space I have to put things, the more things I'm going to get."

Farmers markets are exciting for Stowaway. "I'll come back with everything that's beautiful." But then he has to manage the shelf life of dozens of ingredients. Because he doesn't want to waste food, Stowaway will get by with one small refrigerator.

In his business plan, Stowaway has $100,000 set aside for his opening costs. For this he turned to Kickstarter with a goal of raising $80,000. Another Kickstarter benefit is that the campaign is connecting him to guests eager for his style of food, which he calls "California Tex-Mex."

When he signed his lease on May 28, it was after lengthy negotiations — all of them during the coronavirus, which gave the chef an edge. 

"One big thing that we fought for was protection from something like COVID-19," he said. "If things get shut down, if we can't build because we get shut down again, which will mess up our timeline in terms of when we start paying rent." 

His lawyer also included language that, if the virus comes back within two years of opening, Stowaway will only be responsible for 7% of sales.

The base rent for the over 3,000-square-foot space is a little over $11,000 a month, which Stowaway feels is manageable. After many drafts, the landlords also committed to a significant amount of tenant improvements. Once the build-out is complete, Osito's centerpiece will be a large kitchen with a steel and brick hearth for cooking; a 28-person communal table for one nightly seating; and a more casual bar for drop-ins. 

"Without the bar, I don't think it would be doable," he said. "We want to be realistic about the financial needs of a restaurant and having two revenue streams will help significantly."

Stowaway found inspiration from chefs in his community — and, while they were skeptical about his plans, have been inspired by what he's done so far

The word community comes up often, and for Stowaway it includes his mentor, Brandon Jew, the chef owner of Mister Jiu's in San Francisco's Chinatown. The pair first met at Bar Agricole. 

It was Brandon who convinced Stowaway to work for him at Mister Jiu's while he was raising money for Osito. He told Stowaway: You don't know how long it's going to take. You have to have a job while you're trying to open a restaurant. "He didn't want me to be worried about my income and my bills," said Stowaway.

"I've told him a couple times that this isn't a good time to open the concept he wants to open," said chef Jew. But he gives Stowaway a lot of credit to move through this process in light of what's happening. "I'm excited to see what he builds."

David Yoshimura is another chef in their circle. The Japanese chef planned to open Restaurant Nisei this past May. "We were getting serious in March, and then we were getting more hesitant," said Yoshimura. "If anything, I feel like I dodged a bullet." 

After that, his investor backed out and Yoshimura was forced to regroup. Today, instead of helming his own kitchen, he's using Instagram to sell take-out bento boxes prepared in Mister Jiu's kitchen. 

Yoshimura was impressed when Stowaway signed his lease. "It made me question what I was doing: 'Should I be backing down or pushing forward?'" Yoshimura is now looking at smaller, ready-to-go spaces. When and if he does sign a lease, it will include COVID-19 language.

For his part, Stowaway seemed to have no doubts. "My feeling is that people are going to want to do special things. They're going to want to celebrate, and they're going to want to be together. And they're going to want to have people who will provide that."

When he put it that way, I had to agree.