For a $2,400,000 raise, the SEC requires a “reasonably detailed” breakdown of how the funds will be used in your Form C. Because your Lynchburg project involves both a property acquisition and a value-add renovation, your table must balance hard construction costs with the “soft costs” of crowdfunding.
Gonen Statutory Trust: Use of Proceeds Table
This table represents the $2.4M budget for the Lynchburg project, assuming you reach your full funding target.
| Category | Description | Percentage | Estimated Amount |
|---|---|---|---|
| Property Acquisition | Purchase price of the Lynchburg asset | 55% | $1,320,000 |
| Renovation & Hard Costs | Structural upgrades and modernization | 25% | $600,000 |
| Intermediary Fees | Platform commission (est. 7-8%) | 8% | $192,000 |
| Professional Services | CPA Audit, Legal, and Form C prep | 4% | $96,000 |
| Operating Reserve | Pre-rent-up carrying costs & contingencies | 5% | $120,000 |
| Marketing & Launch | Campaign awareness for the $2.4M raise | 3% | $72,000 |
| Total Proceeds | 100% | $2,400,000 |
Critical Instructions for Form C
- Over-subscription Disclosure: You must state whether you will accept more than your $2.4M target. If you do, you must explain exactly how the “extra” money will be used (e.g., “Additional funds will be used for high-efficiency solar upgrades”).
- Intermediary Compensation: You are legally required to disclose the exact percentage or dollar amount your funding portal charges. If they take a “success fee” in the form of equity (shares), that must also be listed.
- Liquidity Impact: In your filing, you should discuss how this $2.4M will impact the trust’s overall liquidity and how quickly you expect to deploy the cash (e.g., “Funds will be deployed within 90 days of closing the offering”).
The “Target” vs. “Maximum” Strategy
Under Reg CF, you can set a Target Offering Amount (the minimum you need to move forward, e.g., $500,000) and a Maximum Offering Amount ($2,400,000).
- If you don’t hit the target by your deadline, all investor money is returned.
- If you hit the target, you can “close” on those funds and continue raising up to the maximum.
Would you like me to help you define a “Target Offering Amount” for the Lynchburg project that allows you to start the acquisition even if you don’t reach the full $2.4M right away?