Technology Closes the Gap between Self-Directed IRAs and Crowdfunding Platforms

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Acquiring private equity in an up-and-coming company used to be a tough proposition. Without listings on established exchanges, privately traded companies may reserve their equity shares for big-time investors or their friends. Self-directed investors may therefore find it difficult to allocate their tax-advantaged retirement dollars toward a private placement.

Technology is helping remove the barriers between individuals and their desired investments. A key example to this effect has been the rise of equity crowdfunding, which has granted easy investor access to start-up companies from the comfort of one’s home computer. Thanks to Title III of the JOBS Act—which opened the door for non-accredited investors with smaller bank rolls—just about anyone can get in on the ground floor of a new business. Through online platforms, prospective investors can review opportunities and examine pertinent documentation related to the business. They can pull the trigger on a private equity stake if they like what they see.

As with many alternative investment options, positions acquired via crowdfunding are allowed in retirement plans. New Direction Trust Company understands the desire of clients and their asset vendors to utilize a consistent and prompt transaction process. As such, we have worked diligently to incorporate state-of-the-art technology into every facet of our business. Our application program interfaces (APIs) provide a seamless integration of a client’s IRA portal and the equity crowdfunding platform of his or her choosing. Our APIs will allow clients to browse offerings; open new IRAs without having to leave their crowdfunding portals; and initiate new investments from their online dashboards.

API technology empowers IRA investors in other arenas as well. Peer-to-peer lending has emerged as an online investment vehicle that shares the crowdfunding spirit – Small investors can help finance the big projects they believe in and earn a slice of the profits. While crowdfunding platforms provide equity in a business, peer-to-peer lending allows investors to yield interest payments.

Think you can’t afford to invest in property? Similar technological platforms are helping investors tap into the booming real estate market without having to shell out six figures to buy a house. Retirement plan holders with smaller balances or those who would rather not take a full leap into real estate can acquire portions of property via equity crowdfunding. They can also acquire fractional peer-to-peer debt on behalf of their plans, either with real estate as collateral or to finance a real estate project.

As alternative assets continue to change the way people build their retirement nest eggs, available technology has simplified the process like never before and exposed a broad range of investors to new possibilities. Please don’t hesitate to give us a call at 877-742-1270 or send us an e-mail at if you have any questions about self-directed investing or would like to get started with a new IRA account.