Explain how investor capital will be used

Start with actual uses

List acquisitions or investments, transaction costs, financing costs, sponsor fees, operating reserves, capital improvements, and working capital as applicable. Use as many real categories as the deal needs. Do not invent small categories to satisfy a progress indicator.

Reconcile the table

Check the total and basis used by the app. Gross proceeds, net proceeds, financing sources, and purchase price may be different figures. Explain contingent spending, a partial raise, or discretion to reallocate funds in the narrative rather than making the numbers silently balance.

Prepare evidence for review

Keep budgets, estimates, loan terms, and the fee schedule that support the table. Counsel should assess the description of permitted uses and the consequences if the target raise is not achieved.

Build a budget you can explain

Enter each actual use of investor capital with a category and amount. Distinguish purchase or investment proceeds, closing costs, reserves, operating capital, and any fees funded from the raise. Do not add rows solely to reach a particular count. One clear category can be more accurate than several invented categories.

For a fictional $1,000,000 raise, uses of $850,000 for the investment, $100,000 in reserves, and $50,000 of disclosed costs sum to the target. If your figures do not reconcile, identify the difference rather than forcing a balancing entry without a real purpose. Document any other funding sources separately and review the complete capitalization with your team.