Use of funds is the breakdown of how a company plans to spend the capital it is raising, split into categories such as product development, sales and marketing, and operations. In Equidam you enter it on the Funding page, next to the amount you are raising. It appears in your valuation report and in a peer comparison, but it does not enter the valuation methods.
What is use of funds and why do investors ask for it?
Use of funds shows an investor what their money will pay for. A clear split ties the size of the round to concrete plans, so the investor can judge whether the amount matches the goals. The hint on the Funding page puts it this way: investors are easier to convince when the capital adds fuel to something that already works, rather than paying to build the engine.
Where do you enter use of funds in Equidam?
Open Funding in the sidebar. Under Current Funding Round, answer Yes to "Is the company currently raising capital?", type the amount in Capital needed, then fill the Use of Funds table below it.
The table has six fixed categories, each with a short description beside it:
Product and R&D: building and improving products or processes.
Sales and marketing: creating and communicating the product's value to customers, partners and society.
Inventory: raw material and finished goods held before sale.
Operations: day-to-day running costs such as location, procurement and processes.
Capital expenditures: buying tangible and intangible assets, such as equipment, real estate, brands or patents.
Others: anything not covered above.
Put salaries in the category the person works in, as the table's instructions say. A developer's salary goes in Product and R&D, a salesperson's in Sales and marketing.
To rename Others, click Edit next to it, type up to 50 characters and press Enter or the check mark. Escape cancels. Once you have set a custom name, a Reset link appears that puts the name back to Others. The custom name replaces Others in the report chart.
When you change anything, a Save button appears. If you try to leave with unsaved edits, Equidam asks you to confirm first.
How do amounts and percentages relate to the capital needed?
Each row has an amount, in your company currency, and a percentage of Capital needed. Fill in either one and Equidam calculates the other:
Type an amount and the percentage becomes amount divided by Capital needed, rounded to 2 decimals.
Type a percentage and the amount becomes that share of Capital needed, rounded to a whole number.
Change Capital needed and every row keeps its percentage; the amounts are recalculated.
The Funds allocated panel adds up all six amounts. Its donut shows that total as a percentage of Capital needed. The unallocated share is a gap in the ring, and above 100% the whole ring turns red.
Two warnings appear under the donut:
Exceeding 100%: "You are allocating more funds than the ones raised". Lower one or more rows, or raise Capital needed.
100% not reached: "You are not allocating the whole capital raised". Allocate the remainder, for example to Others.
The warnings are advice only. Equidam saves the split whatever its total, so check it before you generate a report.
If you change the amount on the How much are you raising? card instead of the Funding page, Equidam rescales your existing split so each category keeps its share of the new amount. An empty split stays empty.
Does use of funds change your valuation?
No. The six use of funds amounts are not inputs to any of the five methods. Capital needed is: it feeds the VC method and both DCF methods, which work out the share of equity an investor receives for that amount. Editing the split leaves your valuation range unchanged; editing Capital needed can move it.
Where else does your use of funds split appear?
The split is used in three places outside the Funding page:
Valuation report: when Capital needed is above zero, the report includes a Use of funds chapter, with the line "Here is a breakdown on how the company will use the capital raised" and a pie chart of your categories. When Capital needed is 0, the chapter is left out. The interactive report link shows a Use of Funds section only when there is something to chart.
Benchmarks: the Budget Breakdown Benchmark in the Benchmarks tab compares your split with the median split of peer companies. The median uses, for each company that matches your Benchmarks filters, the latest saved split that has an amount above zero, and is converted into your currency.
Company data export: the Download Company Data Excel file on the Reports page includes the six use of funds amounts.
The report chart follows these rules:
If your categories add up to less than Capital needed, the difference appears as a slice labelled "Not allocated". An empty table with a positive Capital needed gives a chart that is one "Not allocated" slice.
Categories left at 0, or worth 0.5% or less of the allocated total, are left off the chart.
Limits
Plan: the Funding page has no lock on the free plan. Generating the valuation report and Download Company Data need a paid plan. The Budget Breakdown Benchmark needs a paid plan with Benchmarks access.
Prerequisite: the 10-question estimate must be complete before the Funding page saves.
Categories: the six categories are fixed. You can rename Others only; you cannot add, remove or rename the other five.
Others name: 50 characters at most. Spaces at either end are trimmed, and an empty name reverts to Others.
Blank rows are saved as 0.
Not raising: clicking No sets Capital needed to 0 and hides the table.
Benchmarks sample: the Budget Breakdown Benchmark loads only when your Benchmarks filters match at least 5 companies. With fewer, the section does not load.
Guest members have read-only access and cannot save the Funding page.
Common questions
Can I import my use of funds from Excel?
Yes. The Import Data template recognises rows named after the six categories, along with common variants such as "R&D", "CAPEX" or "Other", and fills the matching lines.
Does the donut percentage update before I save?
Yes. The amounts, percentages, Funds allocated total and donut recalculate as you type. Nothing is stored until you click Save.
Is my split shown to other companies?
Not as your own figures. The section shows a median per category, not individual companies' splits, and loads only when your Benchmarks filters match at least 5 companies. Your saved split can count toward the median that other users see.