Investing In Venture Capital With Your eQRP

11th October 2023 | By Joel Landon

As somebody sitting smack dab in the middle of our member’s investment journey, I have the opportunity to hear and listen to the many investments they engage in. In addition to hearing about the investments they participate in, they share how they feel about the investment.

Surprisingly, I’ve interacted with a lot of members who have been pulled into investments because it’s really all they know. I don’t blame them initially–it can sometimes be challenging to find the right opportunity. The opportunity gives them the peace of mind they need to sleep at night.

Our members have worked hard for their money. Not everyone can gamble on an investment. In most cases, it can make or break our member’s retirement. The question remains, what is right for me? What or who am I going to trust to take my retirement to another level?

What Is Venture Capital?

Venture capital is a unique opportunity to invest in a business startup. With venture capital, an investor can invest their money into the business with the expectation of a significant return on their initial investment. As the business grows, the investor will see their return once the company is sold to a larger corporation or the capital markets step in to provide liquidity.

In our lifetime, there have been several popular examples of investors who have made their fortune through VC opportunities. Facebook, Apple, and Google are great examples of VC investments that have provided incredible returns. While I lived in Utah, I watched and interacted with some early investors in some of the most profitable investments sold in the last decade. I watched Qualtrics, Vivant, Purple, and Divvy investors walk away with incredible returns from their early investments.

Something to consider

Investing your eQRP money in venture capital can be a great retirement strategy. Your intentions with your retirement funds are to maximize the growth potential over some time. However, this isn’t always easy. With so many competing opportunities and having limited access to VC opportunities, it can be challenging for the individual or beginner investor.

Fortunately, there are communities built outside the institutional investors that help the beginner and individual investors find these opportunities. eQRP partners with Vitruvian Ventures to provide the individual investor front-row access to these types of investments.

When I think back to Vivant, Purple, and some of the others, it always started with “who you know”. eQRP has built over time a community of like-minded investors that are looking for the opportunity to maximize their growth potential.

As a member of eQRP, you can have the peace of mind that VC opportunities are being sourced and managed by experienced professionals. These professionals have the skills to bring the right opportunities to the table for you to learn about and participate in.

How do you know which opportunity is right for you?

Understand the business. What specifically is the business developing and offering to its consumers? Do you understand what it is and if there is sufficient demand? During my interactions with investors, I noticed a trend. I notice that investors tend to gravitate toward an opportunity (whether that’s VC or not) that resonates with them.

For example, I can name several engineers that are invested in manufacturing. They’re passionate about the business because they understand it so well. I can think of investors who are dedicated to their w2, family, and hobbies that lean towards multifamily RE because the concept of renting an apartment is easy to understand and they trust it.

Knowing what you’re investing in is half the battle when committing. Fortunately, you can research the business industry on your own and you can learn from the fund managers directly.

What to look forward to

Although the earnings tied to business income are subject to UBIT, the gains on equity when sold are not. This can be a tremendous outcome for you and your retirement if invested with eQRP after-tax funds. Even if you were invested with pre-tax money, you have so many options to walk away with tax-free gains. This is the beauty of investing with retirement funds over non-retirement funds.

While interacting with our members, I hear percentages thrown around often. What I can say for sure is that VC opportunities are synonymous with the highest IRRs. I’ve watched investors plug into a multifamily investment with promises of cash flow within the first 6 months. Accompanied with a 1.5x at the end of year 3. These investments, although generating profits for your eQRP, often feel like not enough butter spread across bread to the investor.

In comparison, investors are holding out on cash flow for 1-2 years with venture capital. Often realizing significantly higher gains of 3-5x or more during acquisition 5 years down the road. What separates investor A from investor B in these cases is the community they are a part of and how effectively these communities connect them to VC opportunities.

Accelerate your potential

There is an entire community of like-minded investors who are a part of eQRP’s ecosystem and willing to share their knowledge and experience with you.

If you’re realizing that VC is an option you’ve yet to explore and you want to know more, just connect with us. Using your eQRP to invest in VC can result in a life-changing opportunity. And considering there’s more opportunity to invest in VC than you realize could shift your interest.

Additionally, learning about the industry and seeking capital can provide the peace of mind you need as you make your commitment. Exploring these options can be a part of your MAP journey. We have a team here willing to discuss with you your next steps.

Written by

Joel Landon