business-plan, investment, cashflowIn January 2015, I had established a startup in Middle east after successfully raising seed funds. Unfortunately, 4 months after, the office was blown up by a bomb because of a sudden civil war and I didn’t have insurance yet… I applied to get investment from some VCs to recover the startup and they asked for the business plan as usual…
My question is: What’s the right way to mention the loss in cash (due to the crisis) in the business plan? Do I need to attach a special report explaining it or I can just mention it in the cash flow or profit-loss report? and under which category of expenses do I need to list the details of lost cash?
You are able to create sub-ledgers for describing special costs and assets. Your goal is to show investors where you have profit-loss by reasons what are not able to plan.
About the Business-Plan you are asked for, I would suggest the following:
First try to get cool and abstract things (I am very sad to here about your pain - I am sorry!).
But you can sell this things to your investors by getting knowledge and becoming an expert.
The best way to do this, is to write a large but well structured analytics report about terror risks. Within this report you also should talk about triggers to become a target.
For example your office is next to a bigger target or you send more confident messages to potential criminals, so they do not think about to attack you. It is about the relative level of interest - also of signs will send to the public if you are attacked. Terror is simple trying this - they are selecting targets by worth of signs to the public (not to you!). This is what you need to make believable for trusting you again.
All the best!
You are operating in a country with high risk. Investors who invest in high risk countries probably are looking for good risk management. Something I suggest you look into.
In your report you should definitely mention the source of the lost money as well as what measures you took to make sure this won’t happen again (i.e. insurance).
Regarding the accounting I hope someone can give you better advice than me, but my hunch is that you would remove the value of the building from the long term assets (if you owned it). Also whatever money you spent to rebuild you’d add it as an expense, since you didn’t lose cash, you reinvested it.
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