My business plan makes a request for some funds to be used to rent coworking space even though my partner and I work comfortably from home. Can we use funds we raise to cover our rent and label the expense 'office space' in our financials?
In general, how much discretion do we have to use funds raised towards towards expenses not explicitly labeled in our business plan?
It's good to be honest with your funders. That's a general principle.
If you are working from home, are you claiming a portion of your home as a business expense on your taxes? (E.g., I claim 33% of a 2-bedroom apartment, as one of the bedrooms is a dedicated office.) It seems like it would be fair to use funds to cover that portion without disclosing it. Do you have the room, business license, and insurance to bring investors and other employees on contractors into the space?
I would avoid using the funds to pay the entire rent; that seems too much like a taxable benefit, which suggests that it's part of your payment package, which is significantly different than what was stated.
My opinion is shaped by my local tax laws and culture. Your particular situation will be influenced by yours.