Private Companies
What is a private company/private equity investment?
Private Companies, in terms of an investment option, consists of an investment in the securities of a company whose securities are not publicly traded on a stock exchange. The purchase of the securities represents an ownership interest in the company issuing the shares. These shares are typically made available to a limited number of investors through a private offering.
What types of Private Company investments can I make with my retirement account?
Private Company investments may be made in a number of different types of companies. Typically those include:
- C-corporations
- Limited Liability Companies
- Limited Partnerships
- Joint Ventures
These investments can be in existing companies as well as start-up enterprises.
Things to remember…
While these investments can be quite successful, please make certain that you do your homework on the company and its principals and consult with your investment, tax and legal advisors prior to committing your retirement dollars to the investment. These investments are self-directed and The Kingdom Trust Company does not perform an investment review to determine suitability or soundness.
How do private company investments in my IRA work?
We’re not promising that your MyRA IRA investment will yield returns of MicroSoft proportions, but investing in a startup, expanding, and/or growing companies can pay big dividends. However, it can also be risky – that’s why you need to do your homework.
In economic times such as these, people are more entrepreneurial:
- New businesses are started due to layoffs or down-sizing.
- Other businesses decide to improve their infrastructure so that they can capitalize once the economy picks up again.
- Still other businesses want to raise capital to expand their businesses through merger or acquisition.
The common thread is the need to raise capital for operations, equipment, land, buildings, etc. For larger companies, this might mean a full-fledged public stock offering on Wall Street. For our investments, let’s consider companies on Main Street – people you may know and already do business with.
For most privately held companies, the need is small enough that a loan might be all that’s required. Some businesses will get their loans through a bank, but what about those companies that don’t qualify for bank loans, or choose not to tie themselves to bank requirements? Where do these companies find the money to get started or to expand? Or maybe you know of a company that is doing an offering of stock to expand its operations. This could be a good time to get in on a growing company with limitless upside potential.
How do I get started?
First you will need a self-directed retirement account, like those offered here at The Kingdom Trust Company. You can complete one of the forms below (depending on the type of retirement account you are interested in) or you can call us at 888-753-6972 and let us fill out the form for you.