Will Equity Crowdfunding build Billion Dollar companies?

Yes it will and this is how it can work.

The future of Private Companies is made brighter everyday thanks to the JOBS act. Currently the Accredited Investor reaps the rewards. On May 16th when Title III passes into effect this will change. All investors can be part of the crowd raise.
Traditional IRA Companies manage your Retirement accounts and try to prevent their clients (investors) , from investing in Private Companies. They have set up strict procedures to encourage investors to stay within their managed accounts as this is their core business.

Self Direct IRA Investment

Self Directed IRA Companies allow investors to “Roll Over” their tradition IRA and assist their clients in making private placement investments. The process is currently both intense and expensive, but, this is a model that can now be used, streamlined and refined for future. The pioneer process is never easy.

The Private Company must adhere to SEC guidelines to be compliant. This is a legal and expensive process that creates barriers to entry for many other companies. There must be strict security procedures implemented to give potential qualified investors access to the Companies private information.
Once an investor has committed and on boarded the process can be initiated. This can take anywhere from 3 weeks to several months.

self-directed-IRA
How many companies will raise capital through self-directed IRAs?

As the equity crowdfunding eco system evolves and the blooms from the infancy in which it sits, there will be innovations in helping streamline the investment process.

Should the Venture Capital Firms be worried?

The new crowd investing landscape opens many Private Companies to new capital without the need for a strong exit strategy and growth. Private Companies can opt to stay private raising capital yearly through Reg D, Reg A+ and Reg CF.
The ability for a Private Companies to fund through this system gives the Principals of that company the ability to build, grow and develop in a more organic way. Venture Capitals strive for the inflated valuations pre-IPO.
More companies will continue to stay private, this will open new innovation in Investment mechanisms aimed at investors.

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