Self-Funding Aquistion w/ Retirement Dollars

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April 27, 2023

by a searcher from Morehouse College in Washington, DC, USA

When doing a fully self-funded search and acquisition, one of the biggest hurdles is satisfying the SBA's equity injection requirement. I'm familiar with leveraging ROBS (Roll Over for Business Start-Up) accounts to use retirement money for the equity injection but I wanted to know if a "self directed" retirement account could be an option. From my understanding setting up a ROBS account takes longer and is typically pricier than setting up a self-directed account. Is it possible to structure a self-directed retirement account in a way that allows you to satisfy the equity injection similar to a ROBS?

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Reply by a searcher
from Claremont McKenna College in San Francisco Bay Area, CA, USA
per my experience, you can invest in a private company with a self-directed IRA (I use ForgeTrust) but you have to be under 10% shareholder and can't be involved in management or on the board.
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Reply by a searcher
from University of Illinois at Urbana in Ann Arbor, MI, USA
My understanding generally matches Andy's.
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