I've gone viral a few times for sharing the story of Peter Thiel's $5B Roth IRA.

It's a pretty cool story of how one man turned some legendary investments into even more legendary tax-optimized investments.

And he's not the only one who's purportedly taken advantage of the IRA!

His PayPal cofounder Max Levchin reportedly held over $100 million of Yelp stock inside his Roth.

Ted Weschler, one of Warren Buffett's investment deputies at Berkshire, grew an IRA account worth more than $250 million.

Even Mitt Romney's SEP IRA famously ballooned past $100 million.

These are extreme outcomes, but the account behind them is available to just about anyone.

(And if you think your income level locks you out, here's how high earners still get tens of thousands into a Roth every year.)

Today I'll help explain how startup investing inside a Roth IRA can actually work, why it can be one of the most powerful (and misunderstood) tools in personal finance, and how you may do it without blowing up your account.

In this issue:

In 1999, Thiel reportedly moved $1,700 into a brand-new Roth IRA and used it to buy 1.7 million PayPal founder shares at a tenth of a penny each.

When eBay bought PayPal in 2002, his Roth reportedly held $28.5 million (all of which tax-free on gains by the way).

He never contributed another cent, and by the end of 2019, the account had reportedly grown past $5 billion.

Thiel’s strategy doesn't require founder shares or a generational company though.

One of my very first investors in Teachable wrote us a $10,000 check from his Roth IRA.

And when we sold the company in 2020, that $10,000 had grown to $200,000.

His tax bill on the gain? Zero.

Strip away the jaw dropping numbers and the observation is identical whether you're Peter Thiel or someone writing a $10,000 angel check: it may be worth holding high-upside startup equity in an account where the gains may never be taxed.

This was one of the central beliefs behind Carry.com, my last startup.

A quick refresher on why the Roth IRA can be such a good deal:

Most people fill their Roth with public stocks and index funds.

That's a perfectly fine way to use your dollars, but it may slightly waste the magic.

Think about it in terms of where an asset should live.

A Roth's whole superpower is that it erases the tax on growth.

While a 4% bond in a Roth can move the needle, an investment that might increase by 50x could earns its keep.

And few investments are more asymmetric than an early-stage startup.

Say you put $10,000 into a startup that goes to zero (which is often the most common outcome, to be clear).

Taxable account or Roth, the result is the same: you're out $10,000.

But say it increased 50x's to $500,000.

In a taxable account, you'd hand north of 23% of that gain to the IRS between long-term capital gains and net investment income tax (well over $100,000).

Inside a Roth, you keep all of it (as long as it remains in the account until you are 59 1/2).

When the downside is identical and only the upside gets taxed, the highest-variance bets can be the ones you want inside a Roth.

This is the logic behind my own barbell approach to my personal investing.

So most of my money just indexes the market, but I keep a small sleeve of my Roth for asymmetric startup bets, on the off chance one of them hits.

This is where people can get themselves into trouble, so read carefully.

A Roth IRA is powerful, but the IRS draws bright lines around what you're allowed to do inside one:

None of this is a reason to avoid the strategy. It's a reason to do it deliberately.

Even once you've cleared the IRA investment rules, there's a bigger obstacle.

Thiel had founder shares. Levchin was an early Yelp investor. My Teachable investor knew me personally.

Every one of these stories starts with access to a deal.

In my opinion, access (not always strategy) can be the real barrier for most people when it comes to private markets.

And for most of history, you had to be a well-connected insider just to see a startup deal worth putting in your Roth.

That's the piece that's finally starting to change…

Here's some ways you may put this to work:

1. Get real money into your Roth. The $7,500 annual limit isn't the ceiling it looks like. If you're a high earner, there are several ways to fund a Roth well beyond that like the mega backdoor Roth, which can move tens of thousands of dollars into the account every year.

2. Keep the core boring. Index the majority of the account and let it compound. Most of your Roth should be doing nothing more exciting than tracking the market.

3. Size a sleeve you can afford to lose. Set aside a small slice of the account for high-upside startup exposure. Think of it as money you'd be genuinely fine writing off. If one of those bets hits, it hits inside the tax-free wrapper. If it doesn't, it doesn't cost your retirement.

4. Use the right account. A standard brokerage Roth won't hold private shares. You'll need a self-directed IRA and a custodian that handles the paperwork and annual valuations.

Now its time to actually getting your hands on startup deals worth holding in the first place.

And that's the part of what we're working on at USVC.

For most of my career, getting startup exposure meant having the right connections (and I’ve been very lucky to have many of them!).

At USVC, we're working on opening the ability to invest in the fund directly from a retirement account (including a Roth IRA) through our partnership network.

A quick refresher on USVC: it's a broad-access fund that lets any U.S. investor get exposure to promising private companies.

The portfolio today includes exposure to companies like Mercury, Supabase, SpaceX, Mercor, Anduril, Recursive, Zip, Crusoe, and Anthropic.

It's $500 to get started, and the whole point is to chip away at the exclusivity that's kept startup investing out of reach for most people.

We're rolling out retirement-account access in stages, starting with a waitlist for IRA access, with the goal of announcing access in August.

Join the waitlist here to be one of the first notified →

This way you can run a similar play to the Thiel’s of the world.

Until next time!

— Ankur

P.S. Joining the waitlist just puts you first in line to hear when IRA access opens! It doesn't commit you to anything. And if you want to learn more about USVC, consider subscribing to our newsletter unlisted.usvc.com

P.P. S. A few weeks ago, I shared that we launched a co-investment program for investors interested in going deeper in startups. Our first deal went live last week to members! The program includes access to individual deals alongside your USVC position, with a $250,000 minimum investment in USVC or other vehicles managed by AngelList Asset Management (AAM) for qualifying investors, with admittance further subject to AAM’s sole discretion. You can express your interest here or grab time with our investor relations team to talk it through.

I'm the Portfolio Manager of USVC and receive compensation in that capacity. I am also a shareholder in USVC. This email contains an endorsement of USVC by a compensated party.

This post is for informational and educational purposes only and solely reflects the personal views of the author. It is not investment, legal, tax, or professional advice. Any examples, experiences, or investment returns discussed do not guarantee future results.

Investors should carefully consider the investment objectives, risks, sales charges and expenses of USVC before investing. USVC's prospectus contains this and other information and may be obtained at http://usvc.com/prospectus or by calling +1 (844) 988-1720. Read the prospectus carefully before investing.

Select is a co-invest program alongside USVC. There is no guarantee USVC will invest in any specific opportunity in the Select program.

Admittance to the program is subject to the sole discretion of AngelList Asset Management, LLC (”AAM”). There is no guarantee you will be admitted to the program or get access to any specific deal if admitted to the program, and you may have your allocation reduced due to regulatory or other reasons.

This communication is for informational purposes only, is not intended to be a recommendation for any investment or other advice of any kind and shall not constitute or imply any offer to purchase, sell or hold any security or to enter into or engage in any type of transaction. Any such offers will only be made pursuant to USVC's prospectus, which should be carefully reviewed before investing.

Investing in the USVC Venture Capital Access Fund involves significant risk, including the possible loss of principal. Venture capital investments are speculative, illiquid, and subject to a high degree of risk. Past performance does not guarantee future results.

USVC Venture Capital Access Fund is distributed by North Capital Private Securities (NCPS), member FINRA/SIPC. NCPS is not affiliated with USVC's adviser or its affiliates.

Investing in USVC's shares involves substantial risk, including the potential loss of your entire investment. Shares are not listed on any exchange, are illiquid, and liquidity is limited to periodic repurchases at the discretion of the Board, which are not guaranteed. This investment is speculative and suitable only for long-term investors who can bear the risks of limited liquidity. Certain conflicts of interest involving USVC and its affiliates could impact USVC's investment returns and limit the flexibility of its investment policies. Past performance does not guarantee future results. Fees, expenses, and conflicts of interest may reduce returns.

USVC's shares have no history of public trading. You should not expect to be able to sell your shares other than through USVC's repurchase policy, regardless of how USVC performs. USVC does not intend to list its shares on any securities exchange during the continuous offering, and it does not expect a secondary market in the shares to develop.

USVC invests in private funds which are subject to certain risks including those related to illiquidity, indirect fees, valuation, limited operating histories and limited information regarding underlying investments. As a result of the foregoing, an investment in USVC's shares is not suitable for investors that require liquidity, other than liquidity provided through USVC's repurchase policy. The amount of distributions that USVC may pay, if any, is uncertain.

USVC Select refers to co-investment opportunities offered through separate private placement vehicles. These vehicles are not part of, and do not represent an interest in, the USVC Venture Capital Access Fund. They are offered only to accredited investors. Nothing in this communication is an offer to sell or a solicitation of an offer to buy any interest in any USVC Select vehicle; any such offer will be made solely through that vehicle's own offering documents, which should be reviewed carefully before investing. Participation in the USVC fund does not entitle any investor to participate in USVC Select. USVC Select vehicles and the USVC Venture Capital Access Fund are managed by AAM; the allocation of investment opportunities between them presents conflicts of interest, addressed through the AAM's written allocation and conflicts of interest policies, which may still affect investment outcomes.