Since the beginning of 2014 we are seeing startups disturb just about every niche of every industry. Much of this is because it is so much easier today to start up that business you always dreamed of. Because of that we are seeing so many amazing ideas come out that are actually able to come to fruition.
One major reason it is easier to start that company you always dreamed of is that there are so many building blocks available for those wanting to start their company. There is free education on the internet available, open source code and APIs available to get you going. This is allowing new startups to keep new business costs super low.
Another building block that has a huge impact on the ability to get that startup idea into an actual company is the ease to secure capital With the advent of online startup investment platforms there are more ways than ever before to get that money you need to get your business ideas into an actual product, service, ect.
Startups are finding a way to make it in a world of big business. Startups are a huge force to be reckoned with and it doesn't seem like anything will change for the near future. In fact, Forbes recently put out an article stating why startup investing will blow up. The following are the three reasons they say it will blow up
1- The leading industries are growing at record levels
Forbes states that over the past three years the top sectors for startup companies have been internet, healthcare and mobile/telecom. Suposedly these sectors alone received around 78.8% of angel dollars. The average round size for these three sectors also grew.
As innovations continue to come out in technology this seems to confirm the prediction that over the coming years these industries will only continue to grow.
2- The benefits of startup investing are apparent and interest is increasing
A report by SharesPost wrote about historical return analysis and asset allocation strategies detailing investments in private growth companies that showed the benefit of alternative assets in any investment portfolio. The key though is that it was concluded that an investor who allocates just 5% to private growth companies or alternative assets, and the remainder to benchmarked portfolios, could have experienced significantly higher returns.
Again, the trend is pointing to increasing growth and trends.
3- Startup investing is on the verge of accessibility to the the general public
On September 23, 2013 the ban on general solicitation was lifted via Title II of the JOBS Act, and proposed rules for Title III have been set and commented upon. With all of this change that is happening with startups the laws haven't been nearly has updated as they should be. With the new changes in the laws it makes it even easier for startups to head in the right direction. With the advent of online equity crowdfunding there probably hasn't been anything bigger to help take the ideas of investors and make them into real companies.
What does this mean? It means that we are living in exciting times. The times where only the rich and famous could invest in startups is coming to an end. The near future will allow for greater access to the general public. Sadly though we aren't quite there yet for those who want to invest in business. For those who are aren't considered rich one of the only ways that they can invest in any business is through private placements.
One of the biggest issues to investing in private placements for those that are not rich is coming up with the money. A way to get past this issue is to use the money in your IRA. Investing in private placements can be a great way to diversify your retirement portfolio. Investing in private placements through a self directed IRA is a solid way to invest in startups.
Now is one of the greatest times to invest in private placements and startups with an IRA. With the potential growth that can come with a startup it can really take your retirement portfolio to the next level. Now is the time to diverisfy your retirement portfolio with a self directed IRA.
For more information about private placement investing with a self directed IRA contact us today.
Author: Nick Barker