Self-Directed 401K as a Funding Source from Friends & Family

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by a searcher from University of Pennsylvania - The Wharton School
in Laguna Hills, CA, USA

8yrs ago

Self-Directed 401K as a Funding Source from Friends & Family

All-

Any self-funded searchers raise equity capital from individuals (friends and family) through a self-directed 401k platform like Directed Equity (link below)?

redacted

My understanding is it allows you to lever up tax-deferred retirement assets as a equity funding source towards a business acquisition. I’m a fan of this concept and curious if anyone has any experience with this medium to pool equity capital.

Any insights are appreciated!

Abdulla Mirpur

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827 Views

reply by a searcher 6yrs ago
from IESE Business School in 78430 Louveciennes, France

Hi Colin, thanks for your sharing. I have funds blocked in a 401k from the time I’ve worked in the US. I’m now living in Europe and starting my fund for a future purchase probably in France or Spain. Do you think it would be possible for me to use my 401k funds to buy equity at the time of purchase for a company located in Europe? Thanks

reply by a lender 6yrs ago
from University of Missouri in St. Louis, MO, USA

Hi Christina, honest answer is that I have no clue. My ROBS knowledge is specific to SBA acquisition where the equity is coming from the ROBS program and that is where there is some current confusion. As far as using the ROBS program for an acquisition outside of the US, that would be more of an accounting and/or legal question.