New Feature: Investing in Startups via a Tax-Advantaged, Self-Directed IRA
FundersClub has rolled out a new feature that allows accredited individuals to invest in startups via a tax-advantaged, self-directed IRA account. A "self-directed" IRA means that you have complete control over selecting and directing your own individual retirement investments. The feature has been built to allow accredited investors to invest from their IRA in any startup, not just the ones available on the FundersClub platform itself.
Investing in startups via an IRA account gives an accredited investor the option to diversify his or her retirement portfolio to include the startup asset class in a tax efficient manner. Any growth or earnings can accumulate tax free; this includes any interest, capital gains, or dividend income from an individual’s original investment which can grow tax-deferred after a company’s IPO or acquisition. Note that investing in startups carries high risk and you should consult your financial advisor before deciding how to allocate your portfolio.
We’ve partnered with The Entrust Group, a company that has provided account administration services for self-directed retirement and tax-advantaged plans for over 30 years, to offer this feature.
As technology continues to evolve and software occupies every nook and cranny of our lives, we’re seeing a greater move towards democratization and access in the fintech and financial sectors. Whether or not you believe you should be deploying a portion of your IRA funds in alternative assets such as private companies and startups, having the control and freedom to do so is empowering to the individual and a right that we should, and now can, all enjoy.
Prior to joining FundersClub, Jason was a Tax Manager at Frank, Rimerman & Co. LLP, where he worked closely with entrepreneurs, venture funds, technology companies, real estate partnerships and private foundations. His experience also includes mergers and acquisitions and general corporate compliance. Jason received his Bachelor of Arts in Business Management Economics from the University of California Santa Cruz.