Startup Investing with a Self Directed IRA

Startups and Self Directed IRAs provide an incredible opportunity for both investors and startup founders. Investors get a chance to diversify in a venue that is normally unavailable to them. With a Self Directed IRA, they can now place a sensible percentage of their retirement account in a potentially profitable startup. The startup founder also benefits by being able to access a source of funding in an easy and professional manner.

How Does It Work?

When an investor decides to diversify with a startup, the first step is to open a Self Directed IRA. This is an easy process. The investor can apply online or contact Madison Trust and work with a friendly CISP trained Specialist. After the initial account opening, funds are transferred to the new Self Directed IRA. This can be accomplished via a rollover from an existing retirement account or by a new deposit. Finally, the account holder instructs Madison to send the desired amount to the investment of their choice. That’s it! Now the investor has a great startup as an asset in their retirement account.

Which Startups Can Benefit the Most?

A Self Directed IRA is a vehicle that can invest in almost any product, irrelevant of the product or services being offered. (The one limiting factor would be Prohibited Transactions.) However, that doesn’t mean it will always be a great fit for your company. Self Directed IRAs work best close to the midpoint of the funding process. They provide an excellent funding bridge once you have an interested base but have not yet grown enough to warrant VC involvement. It’s at this point that your investors are seeing the potential of the company and just need the right vehicle to place an investment. By being able to access a percentage of their retirement funds, they can more easily invest in your company and vision.

What Can Investors Expect When Opening a Self Directed IRA?

The process is a simple one and Madison guides investors every step of the way. It usually takes about three weeks to set up a Self Directed IRA, but in cases of need expedited service is available. From a fee perspective, Madison offers one of the most economical fee schedules. Setup is a one time charge of $50, and the quarterly maintenance fee is $75. (To see how that stands in relation to other Self Directed Custodians, please visit our Comparison Calculator.)

Self Directed IRA Tools for Startups

Madison provides startups with all the tools they need to give investors turnkey investing services. To learn more about the tools available for your startup, please click here.

To learn more how Madison customizes its process to accommodate the specific needs of each startup, feel free to call 800-721-4900.

Have Questions?

Read our FAQs, or feel free to contact our team directly.

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Ready to Get Started?

Take control of your investments.

open an account

Getting started is easy

1

Open

Your investor completes an online Account Application

2

Fund

Your investor moves their money from an existing IRA/401k into their new Self Directed IRA at Madison Trust

3

Invest

Madison sends a check or wire to your fund


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