Private Placements
In short
Private placements open your plan to venture capital, angel investing, and direct ownership in private companies. A self-directed IRA or Solo 401(k) can take an equity stake alongside other investors, sharing in a company's growth from outside the public markets. This hub covers how these deals are structured and the accreditation and compliance considerations that apply.
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The case for private placements
A private placement lets your retirement plan own equity in a company before there is a public market for it. Most of the value a successful company creates happens during the years it stays private, and by the time shares reach an exchange, the ...
Read articleTypes of private placements
A private placement is an offering of securities sold directly by a company to a limited group of investors, without registration and without an exchange. Your retirement plan can subscribe to these offerings the same way any other investor can, and ...
Read articleInvesting in a private placement - The workflow
Subscribing to a private placement from a self-directed plan follows a defined sequence: review the offering, confirm the plan can invest, certify accreditation, execute the subscription documents in the plan's name, and wire the funds from the plan ...
Read articleWhen private placements trigger UBIT
Plan investors rarely think about Unrelated Business Income Tax when buying stock, because publicly traded companies are almost always C corporations. A C corporation pays tax on its own profits before distributing anything, so what reaches your plan ...
Avoiding disqualified persons in private placements
Your plan can invest in the large majority of private companies raising capital. A small number are off limits, and what puts them there is a set of IRS rules about disqualified persons, the people whose relationship to your plan is close enough that ...
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