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Crowdfunding And Self Directed IRAs

For all of our recent memory and experience, its been illegal to solicit people or investors for investments into any business. This investment space has been relegated to the few that dwell on Wall Street and associate with the right people.

As most of us have learned from the 2008 meltdown, we are mere mortals and at a great disadvantage to Wall Street. However, there is hope.  Recently Washington has approved what is known as the JOBS bill which would make it easier for small companies to solicit and receive investments from private investors. This concept is based upon a concept known as Crowd Funding.

Crowd funding initially started as  a way for small companies to solicit investment by giving away generous amounts or products or services in exchange for money. The so called investor never receives any equity or ownership or any other paper. Instead they are at most receiving goods or services. This gets around the securities laws.

However, with the recent economic meltdown, and dismal, non-existent recovery here has been a push to make private, small business investing less restrictive and easier. This push has led to the JOBS act. The JOBS act attempts to allow small, non-accredited investors, to invest 10% or $10,000 in a private offering. The solicitation restrictions for the business would be removed. There would be a exchange platform in which the offeror would register. The investor can view and qualify the offeror. From there they can choose to invest.

What this means for self directed IRAs

The above discussion is brief at best, but it gives you a taste for what is going on. When this law becomes effective in 2013, it will open a whole new world of investment opportunities for self directed IRA investors.