Does anyone have experience with financing via IRA/401k

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January 13, 2020

by a searcher from Portland State University in Portland, OR, USA

In discussions with a service firm that was funded at inception via founders 401k. Trying to understand what purchase options may available, restrictions that would be inherit in a purchase, or any other items to be aware ? If anyone has experience in such funding and purchase mechanisms, would love to connect and better understand options?

Thank you,

Oleg

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Reply by a searcher
from INSEAD in Singapore
I read this article some time ago, it was quite enlightening (I have never worked in the US so this was news to me): https://www.biglawinvestor.com/secrets-of-a-100-million-dollar-roth-ira/

From what I understood, it can be done as long as you are not a director in the company or have a controlling stake, but as an investor you can do it via IRA.
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Reply by an intermediary
from Northeastern University in Boston, MA, USA
I funded a company through an ERSOP. Not sure that plan works anymore, but I formed a C-corp with an employer retirement plan. The plan owned the shares of the C-corp. When I sold the business 4 years later, the funds went back through the plan. Any excess over the initial investment became taxable income to me. I then invested the retirement assets into traditional rollover RIA. I have heard a firm called Benetrends uses something similar (but I have not used them)
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