Equity crowdfunding is not to be confused with donation-based crowdfunding (donor, cause, charitable or religious crowdfunding) or rewards-based crowdfunding, which are not applicable to investments with retirement funds.
Investing in crowdfunding opportunities has become increasingly popular in the last few years.
Also known as crowd financing or securities crowdfunding, crowdfunding is an investment into a business or project offering ownership in exchange for investor capital. Unlike rewards-based projects that offer a t-shirt, the product being funded or other tokens, crowdfunding with retirement funds offers a set return on an investment over a predetermined time frame.
The passage of the Jumpstart Our Business Startups (JOBS) Act in 2012 lifted the general solicitation ban, essentially allowing companies to publicly advertise that they seek investment capital. This, in turn, led to the proliferation of equity crowdfunding portals (or platforms) to help startups and private companies connect with investors. And further changes in the years since have allowed unaccredited investors a piece of this investment pie. These changes have also led to similar growth in the marketplace lending category.
As a result, crowdfunding is drawing in significant pools of capital and grabbing a lot of the attention of Wall Street, but many are still unaware of the retirement investment opportunities via crowdfunding. The Self-Directed IRA is the primary retirement vehicle that can crowd finance, and eligible investors can use tax-advantaged retirement dollars to invest in almost any crowdfunding opportunity, from tech startups to real estate.
For several years, Kingdom Trust has been a leading service provider for those seeking to use retirement funds for crowdfunding investments.
We’ve established ourselves as a go-to custodian as a result of our service and solutions, not to mention our low account fees and simple online account opening process. By working with our firm, you can self-direct your crowdfunding investments. So, just like you can use a Self-Directed IRA, for example, to invest in private lending and private equity investments, your IRA can also invest in those types of alternative assets via a crowdfunding portal. And Kingdom Trust works closely with various crowdfunding platforms and portals to ensure their investments can be held in self-directed retirement accounts.
How to Get Started
Simply add one step to our regular 3-step process to be on your way to crowdfunding via a self-directed retirement account:
- choose a crowdfunding platform (ensure it allows crowdfunded investments to be held in retirement accounts)
- open a Kingdom Trust account
- fund your Kingdom Trust account via transfer, rollover or contribution
- tell us what you want to purchase
Kingdom Trust does not sell or provide investment advice, but we do custody client accounts investing in crowdfunding opportunities, provided they adhere to SEC regulations. We strongly encourage investors interested in crowdfunding opportunities to conduct the proper due diligence.