Build a Reg CF use-of-proceeds plan that works at the minimum

Give each raise amount a business purpose

Start with the decision the financing needs to support. A manufacturer may need inventory for confirmed demand. A software company may need to complete a product before hiring sales staff. An expansion business may need permits before construction.

Then ask what changes if the company raises less than expected. The minimum target should support a plan you can explain honestly, including its limits. A low target that pays preparation bills but cannot fund the stated project needs a clear explanation of the remaining financing need.

Rule 201(i) requires reasonably detailed intended uses of proceeds, including excess proceeds when accepted. The aim is a description that investors can connect to the business, rather than a broad label such as “growth.”

Separate gross proceeds from business spending

Gross proceeds are the investment amount raised. Usable capital is the cash left for the operating plan after the offering-related cash costs included in your calculation. State the costs you include so nobody mistakes this planning measure for a standardized accounting figure.

Use your actual agreements and professional quotes. Issuance Express compensation can include upfront fees, cash success fees, and securities compensation. Third-party financial preparation, legal work, escrow expenses, and issuer-led marketing can be separate. The offering costs guide explains those categories without publishing a standard price.

Record each cash expense once. If the company already paid preparation expenses from existing cash, show that timing in the cash forecast. If you plan to reimburse those expenses from the raise, identify that use rather than deducting them twice. Securities compensation belongs in the ownership or contractual-obligation model, alongside the cash plan.

Use a minimum, working, and maximum worksheet

The following fictional equipment-services company uses three planning scenarios. The working case is an internal assumption, not a prediction of fundraising success. Every amount is illustrative. The combined expense allowances are company-specific placeholders, not Issuance Express pricing or professional service quotes.

Planning item	Minimum	Working case	Maximum
Gross proceeds	$200,000	$500,000	$1,000,000
Offering-related cash cost allowance	$35,000	$65,000	$110,000
Usable capital for the plan	$165,000	$435,000	$890,000
Equipment and initial inventory	$100,000	$160,000	$240,000
Staff and operating expenses	$45,000	$150,000	$300,000
Customer acquisition	$0	$75,000	$220,000
Cash reserve	$20,000	$50,000	$130,000
Total allocation of usable capital	$165,000	$435,000	$890,000

For your worksheet, replace the expense allowance with separate confirmed cost lines and payment dates. Include marketing costs in the appropriate category according to their purpose and timing. In this example, customer acquisition funds post-closing business marketing, while campaign expenses sit in the offering allowance.

Check that gross proceeds minus cash costs equals usable capital, and that the spending allocations sum to usable capital in every column. Add a note explaining how costs change with the amount raised.

Make the minimum plan operationally credible

In the example, the minimum funds a limited equipment purchase and inventory replenishment. The company uses its existing facility and team. It does not open a new location or hire a full additional crew.

The working case allows a larger inventory commitment, staged staffing, and customer acquisition. The maximum supports broader deployment. Those are different business plans, not the same expansion described with different fundraising totals.

For each scenario, identify the milestone and what must happen before spending begins. A useful row might say, “Order the first equipment batch after supplier specifications and installation approval are complete.” Assign a person to verify the dependency.

If the minimum does not fund the whole project, say what it funds and where the rest could come from. Distinguish committed financing from a proposed loan, an unsigned investment, or an expected future raise. None of those unconfirmed sources should silently close a gap in the minimum case.

Explain reserves, repayment, and allocation choices

Working capital is more useful when you describe the underlying need. For example, “inventory deposits and payroll while customer invoices remain unpaid” explains more than “general corporate purposes.”

Describe a cash reserve’s purpose and the circumstances under which you expect to use it. A reserve for supplier price changes differs from cash intended to cover ordinary operating losses. Your cash forecast should reflect the same assumptions.

If proceeds repay debt, identify that purpose. Give your offering team the loan balance, payment terms, creditor, and any relationship to the issuer. Founder loan repayment needs deliberate review and disclosure rather than an unexplained entry in working capital.

You can describe probable alternative uses and the factors management considers when allocating money. Explain a real decision, such as whether a supplier lead time permits equipment purchases before hiring. Broad discretion language does not make an otherwise vague plan informative.

Match spending to actual closing cash

Investor interest and commitments do not put cash in the company’s operating account. Issuance Express coordinates offering operations and eligible closings. A qualified third-party escrow agent holds investor funds until the applicable closing conditions are met.

Set spending dates using the closing plan confirmed with the offering team. Rule 304 governs completion, cancellations, and reconfirmations. A supplier deposit due before proceeds become available needs another identified cash source.

Avoid committing to a nonrefundable purchase based only on reaching the displayed target. Include a delayed-closing scenario in the operating forecast and identify which spending can wait.

Keep the public plan current

Issuance Express builds and files Form C using your company’s information and coordinates the offering-page presentation. Bring the scenario worksheet, quotes, dependencies, and financing gaps to that process. Counsel and accountants address questions within their professional roles.

During the offering, tell the team if a major assumption changes. Losing a planned facility or redirecting substantial proceeds can change the investment story. Rule 203 requires amendments for material changes, and Rule 304 provides the investor reconfirmation process. Coordinate the update before changing only the page copy.

Before launch, confirm that each scenario explains the funded milestone, the timing, and the remaining risk. That gives investors and your operating team the same practical account of what the raise can accomplish.

Related reading

• What does a Reg CF offering cost?
• Forecast cash and runway before your Reg CF offering
• Build an offering page investors can understand and verify