How You Can Invest in a Private Company With Your IRA

Dr. Kingsley R Chin MBA

Dr. Jason Seale MBA

Aditya Humad

Daniela Hodgkins

Investing in private companies through a Self-Direct Individual Retirement Account (SDIRA) can be a strategic way to diversify your retirement portfolio and potentially enhance growth. This approach allows you to allocate retirement funds into alternative assets beyond traditional stocks and bonds.  By allocating funds into private companies, investors can take advantage of exclusive opportunities typically reserved for venture capitalists and institutional investors

1. Select the Right Private Company.

   • Identify a business with strong growth potential.

2. Use Your SDIRA Custodian

   • Work with a qualified SDIRA Custodian to complete a tax-free rollover from your retirement account to invest in the selected private company.

3. Maintain Compliance

   • Follow IRS rules.

   • Provide investment details, documents and your desired investment amount.

Key Benefits for Investors

• Tax-Advantaged Growth – Earnings grow tax-deferred (Traditional IRA) or tax-free (Roth IRA).

• Greater Diversification – Reduce reliance on public markets.

• Access to Exclusive Investments – Private equity opportunities often yield higher returns than publicly traded stocks.

Is This Right for You?

Physicians, business owners, and accredited investors looking to maximize their retirement savings can benefit from the flexibility and potential higher returns of private company investments. However, it’s essential to perform due diligence and consult experienced professionals to navigate the process.