How do I include war crisis effects and recovery expenses in a business plan for a new investment round?

An agency is an instant cashflow model business. Ugly to scale due to logistics of a team and the mess of being in a client-service business model. But easy to rapidly monetize. Make a phone call. Close a client. Collect the cash. (Yes, that's a bit over simplified). Your girlfriend shouldn't grab a dime from anyone before locking in her first client. An agency can be entirely self-funded and there's little reason to pursue funding. After she had generated her first $50,000 in clients (for example), she can supplement growth with debt financing. And, in no way, is the idea of your generous, retiring parents investing $70,000 into a first time business owner, when statistically most businesses fail ... a good idea. Fair rate is a flexible concept. If I was lending out $70k, I'd want to see 3x $210k back as a minimum. Irregardless of whether that is "fair"... it would be the minimum (for illustrative purposes) where the process of the due diligence and contracts and parting with $70k liquid in trade for a "maybe" $140k gain would be of interest.

The best way to test a person's talent is to put them to work in the reality of your business. If these folks are all onboard for being partners, promise to give them a cut of all deals they bring in. Structure the plan so that the contract lasts three months. Then, let them prove themselves and show (not just say) they really mean it. Make no equity promises until you can validate their claims. What if someone balks at the offer? I'd imagine these folks will have main jobs during the testing phase. If they scoff or refuse, then you've won immediately. If they aren't willing to hustle a bit extra for a few months how in the world could they do this for many years ahead within a successful partnership? Why three months? People can fake their behavior for quite a bit of time. At two months people can't help but being themselves. You'll get a taste for how they work, they're ability to close, and their personality. Personality is the biggest factor, as they may do a great job bringing in business, but be simply unbearable to work alongside. A note of caution around the Head of Marketing SME: this person sounds like a problem. Are they acting immorally towards their current employer? Check, stealing business. Are they sure they can do it on their own, but for some odd reason never have? Check. Are they requesting for more stake than they deserve? Check. These alone are reasons to run. Immoral, unproven, and greedy at the start. To me, you sound like you need to hire a commission based sales person. Give them a stake of each deal. Don't give up equity for something like this. This company is your baby and equity is a last resort.

Delaware C-Corp I usually Delaware is the best choice for any startup looking for fundraising with a US focus. However, if you are a remote and global team, an overseas or foreign corporation or US tax purposes might make sense. You'd have to talk to an advisor who can dive into your situation, but it would be more difficult for the US owner come tax time, as he'd likely have to file form 5471 to the IRS for any controlled foreign corporation, and form 90-22.1 for any foreign bank accounts. There are a lot of other concerns I didn't hear you raise that entrepreneurs usually have and ask me about, namely banking and merchant accounts/ payment processors. In terms of accepting online payments, any US corporation or LLC is far and away the best option for a company. It's difficult to suggest without knowing more about the company but you might explore Delaware, Wyoming, Hong Kong and other offshore jurisdictions for your legal entity. Each tend to have positives and negatives and there is no one size fits all solution. I do write about issues of incorporation quite regularly on my website FlagTheory.com - so you can read those articles for free, or we can schedule a call - Clarity.fm/incorporation when you have specific questions. Thank you and hope this was helpful!

Making sales and figuring out what potential customers want. Really, everything else can be done after you've proven that there really is a business opportunity. www.DavidCBarnett.com

You’re asking some great questions, and beyond the fact that there is no teacher as great as experience, it seems tragic how common this experience is, and making great investments is hard even for seasoned professionals. But it’s incredible how often the only two factors used to assess an investment are how much it will make, and how much they like (or know) the people running the deal, when just a few additional questions can often make all the difference. When looking at a new opportunity, the first thing I do is ask if I believe management’s story. This is really about getting a feel for whether you believe the people running the business or opportunity are qualified to exploit whatever inefficiency they have identified in the marketplace. If they can’t express in simple terms what that opportunity is, why they’re qualified to take advantage of it, and exactly how what they do will generate returns for the investor – run away. This is different than asking if I believe in the management, or like them – it’s about their ability to state in plain language their investment thesis, and back it up with the skills and tools needed to execute. Next, put it in context - consider the size of the opportunity and this investment’s place in it. Is it a big market, or small? Lots of competition or not? Does this investment bring something new to the space and will gains come from new business or is the plan to take it from existing competitors? If there are no crisp answers to these sizing questions, consider it a big red flag. The next bit is about understanding the risk of the investment. The single most common mistake made by investors is mis-pricing risk. Markets are pretty efficient, so there has to be a reason someone else isn’t already doing whatever this investment proposes to do and understanding what this dynamic is can be the single difference between good and bad investments. It may be that nobody has thought of it, or no one can do what this will do at the same low cost. Or there is an asymmetry of information, where you know something others in the market don’t yet know. Whatever it is, trying to understand the risk of the investment is key: understanding the timing of the probable returns, appreciating what could go wrong and how management will respond if it does, what change in the environment (like new laws, new competitors, new technology) could turn the deal on its head, and what assumptions need to remain true through the course of the investment. I’m not sure there is any way to get all of the right before making an investment, and surprises always happen, but the more work done to figure this part out can help determine whether the investment is worth making based on what its expected to return, and it often highlights something just plainly wrong with an investment. Finally, know that there are very few great investment opportunities relative to the number of absolute junk stories out there, and finding ones that make sense for your risk tolerance and timeline just takes work. And experience. And even when you get everything right, sometimes good investments still go bad.