Crowdfunding is democratizing the investment process, making it easier for more people to participate in private investments and lending activities offered online, according to a new report by The Pensco Marketplace.
These opportunities are bolstered by technology, a favorable regulatory environment and lower minimum investment.
The Pensco Marketplace is a platform designed to display a network of providers, products and services for alternative asset investors, including self-directed IRA investors, to make it easier for them to identify and invest in private placement opportunities.
According to the paper, many IRA holders do not realize that besides traditional exchange-traded assets, they can also invest in assets that traditional financial institutions do not offer, such as limited partnerships, private equity and real estate.
"When we consider that $146 billion is currently held in self-directed IRAs, it is easy to see that this new course of investing is only just getting started," the authors write.
"At Pensco, we are watching emerging trends in the technology and investing landscapes closely, which allowed us to recognize the potential opportunity to use retirement dollars to invest in crowdfunding platforms," Kelly Rodriques, Pensco's chief executive, said in a statement.
Crowdfunding Trends
Pensco prepared its report based on perspectives of participants on its platform as well as insights from Silver Portal Capital, a registered broker-dealer that runs a crowdfunding platform.
Following are several trends the paper identified:
