ABSTRACT
This chapter teaches readers the basics of constructing a financing plan, and highlights the differences between a budget and a financing plan. It also provides guidance on mitigating risk, including examples of way that producers can minimize risk for their investors. Readers are taught not just how to read a waterfall, but how to create one, relating back to earlier learnings about income statements and balance sheets. Methodologies for estimating returns for investors are explored, along with the risks of sharing them. A sample waterfall is presented and explored.
