Private Company Investing with Your Self-Directed IRA

 |  Investing in Private Entities
private company

By J.P. Dahdah, Founder & CEO of Vantage

Utilizing the benefits of a Self-Directed IRA is great way to expand your wealth and solidify your retirement.

With a Self-Directed IRA you have the option of operating the same way venture capitalists do when they decide to invest in a rising start-up. Below are three things to consider when deciding to invest in a private company.

1. Ask questions. Do not take the word of the private company, its leadership or founders. When it comes to investments, due diligence is imperative. If you plan to invest your money you should do so under the same premise that Wall Street companies invest. Ask for the full financials of the company to be revealed, ask for the previous year’s budget and for the current amount of liquid cash that the company has on hand. Finally and most importantly ask for projections and then make your own. If they check out, then learn the business.

2. Verify facts. You should never invest in an industry if you don’t have some idea of how it works. You should learn the business of any companies you may be seeking to invest in and then do research to ensure that this is a company that can make a profit. Ensure that their way of doing business is sound. Check their products or services, examine equipment and meet not just the owners, but also anyone who has ties to helping the business operate.

3. Consult with a professional. Finally, sit with an attorney or your investment overseer to get an objective opinion about whether this private company is profitable and viable. Understand your risks and if information you have received makes sense, then sit down with the company heads and configure a deal that makes sense for both parties.

For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or Info@VantageIRAs.com.