Information for Investment Sponsors
The Private Offering Alternative
Accessing retirement funds for private investment is becoming increasingly popular among those who are discouraged with the publicly traded securities markets and want alternatives. For sponsors of private offerings, getting access to capital and helping your potential investors understand their investment opportunities is of utmost importance. Self-directed retirement accounts may be the key for you to access this developing capital source.
Address The Challenges
Monetizing this opportunity can involve a number of challenges.
For example, designing a private offering for SDRA investors means you have to address a number of special concerns that are not common to other types of private offerings, such as:
- The age of the investor
- Valuation for Roth conversion purposes
- Fiduciary status of venture managers
- How long it will take to establish an account with a specialized custodian
- Timely funding of the investment within the escrow period
- The role of the retirement account custodian that holds the investment
- The role of the retirement account owner
- Investor accreditation for retirement accounts
- Acceptance of the investment by the custodian
Our SDRAVenture Capital Services™ are designed to help design the offering materials the investment sponsor provides and get the offering pre-accepted by the right custodian.
Educate the Investor
Once you have formulated your investment offering, your SDRA investors will need to:
- Learn how to invest in a private offering with their retirement funds
- Learn about the opportunity their SDRA investment presents for their personal planning
- Fund retirement accounts with a qualified custodian
- Prepare, sign and submit investment directives to the custodian to fund the private offering
- Fund the private offering investment within the offering period – the crucial final step
Having an independent source of education for your potential investors can be a key to the success of a private offering and help you, as the private offering sponsor, increase your list of potential investors. Our SDRA Basics™ class is designed to help your potential investors learn about the special opportunities self-directed retirement accounts can offer, and to help you establish relationships with potential investors without making a public offering of securities.
Establish A Seamless and Efficient Offering Process
Many investors look to the private offering sponsor to make the private offering process seamless and efficient. On the other hand you most likely will best spend your time talking to investors about the venture itself and securing their commitments to making the investment.
Relying on your investors, on their own, to open and fund SDRA accounts, direct the custodian to accept the private offering and make the investment, and follow up to make sure the investment is funded in a timely manner, presents the risk that your investors will not be ready by the end of the offering period.
Our SDRAVenture Capital Services™ are designed to meet this challenge and make your private offering process as seamless and efficient as possible for both sponsors and investors. We gather the necessary information from the investors, prepare the forms to open and fund the SDRA accounts, and facilitate the investment directives to the custodian with a minimum of delay. We can serve as a practical investor liaison to carry out the private offering.
Contact us at 617-379-6931, Extension 1, to get started and monetize this new capital market!