Let's look at two types of in-kind investments separately:

1. You want to accept services from a third party (e.g., an attorney) in return for 10,000 shares in your company. Follow these steps:

• Value the services. For example, let's say the services have a value of $20,000.
• Enter a new investment round into Offtoa (Assumptions/Financing/Investments/Investors in the menu). The amount of the investment should be $20,000. The price per share should be $2.00. The date of the round should be the effective date of the agreement.
• Enter a new expense line into Offtoa (Assumptions/Costs/Other Expenses in the menu) called “In-Kind Services,” or even better, be more specific “In-Kind Attorney Services.” In the year of the investment round for this expense item, enter $20,000. Keep all other years zero. Because Offtoa distributes Other expenses evenly across all months of the year, your monthly cash flow statement will be a bit out of kilter for that one year; however, all your annual financial statements will remain accurate.

2. You want to accept an item of equipment from a third party (e.g., a strategic partner) in return for 10,000 shares in your company.

• Value the equipment. If it is new, its value is its price. If used, its value should reflect what its used value should be. Let's say it is worth $20,000.
• Enter a new investment round into Offtoa (Assumptions/Financing/Investments/Investors in the menu). The amount of the investment should be $20,000. The price per share should be $2.00. The date of the round should be the effective date of the agreement.
• Enter a new Major Purchase into Offtoa (Assumptions/Costs/Major Purchase in the menu) called whatever the equipment is. The month and year of purchase should be the same as the month and year of the investment round. The purchase price should be $20,000. The useful life should be whatever the remaining life of the equipment is. See IRS regulations if in doubt. This entry will start the depreciation process.

Related Questions:

How do I create an investment round?

How do I create a major purchase?