Silly Money
USVC is now available on SoFi
For the past two years I've written this newsletter around one idea:
How you hold an asset can matter just as much as what you hold.
Today that core belief and the new thing I've been building finally collide.
Here’s why this is a big deal, and why the tax math might be more interesting than almost anything else I've covered.
What we’re announcing today
SoFi added USVC to its alternative investing platform today, and I couldn’t be more excited about it!
SoFi has spent years making private markets more accessible to retail investors.
They were one of the first platforms to make IPO participation available to retail investors.
They have long supported low-minimum alternative investment funds via partnerships.
And even their framing for this launch is "alternative investments, now for the rest of us," roughly what I'd have written if they'd asked me.
But the reason we’re excited about this partnership isn't just values aligned — it's the plumbing SoFi has built for individual investors.
Among its many products, SoFi offers self-directed investing, including through an IRA.
And while that may sound like a boring detail, it’s a critical unlock for tax-effecient investors.
Having access to a private asset inside a retirement account has technically been possible for years.
In practice, though, it often meant opening a specialty self-directed IRA with a niche custodian, paying a setup fee, paying an annual account fee, and pushing paperwork around every time you wanted to buy something.
It can be enough friction to deter almost anyone from getting started.
(It was also one of my key insights behind my last startup, Carry.)
Today, a U.S. investor can buy USVC inside a Traditional or Roth IRA on SoFi.
Until today, every dollar that has gone into USVC was after-tax money from a taxable account.
For the last four years, I’ve held strong conviction that investing through most powerful accounts in the tax code shouldn't be limited to a few stocks and bond.
SoFi has done it at a scale I couldn't have reached alone.
And because we believe in the potential value here, SoFi has agreed to cut their transition fee by 50% for the next 60 days for anyone who invests in USVC through an IRA!
The minimum is still $500 to get started, but now you can do it through a tax-advantaged account.
Why an IRA could be the right home for this
Just a few outlier examples of IRA investments gone right:
1. Peter Thiel reportedly grew a $5B IRA through some legendary startup investments.
In 1999, he reportedly put $1,700 into a brand-new account and used it to buy 1.7 million PayPal founder shares at a tenth of a penny each. When eBay bought PayPal in 2002, the account reportedly held $28.5 million. He went on to hold Palantir founder shares and the seed round of Meta inside it.
2. Max Levchin reportedly built a $100M+ IRA from Yelp stock.
Thiel's PayPal cofounder skipped the founder-share move and did something arguably safer. He was one of the first investor in Yelp and made a material part of that investment from his Roth. Yelp's 2012 S-1 disclosed the account held 13,258,588 shares. At the $15 IPO price, that's comfortably over $100 million.
3. Ted Weschler reportedly grew a $250M+ IRA from savvy public market investments.
Buffett's investment deputy at Berkshire started in 1984 with nothing more exotic than a 401k and an employer match. He rolled it into a self-directed IRA and compounded at roughly 22% for 15+ years, entirely in public stocks anyone could have bought. In 2012, with the account over $100 million, he converted the whole thing to a Roth and ate a $28 million tax bill. It's since grown past $250 million, none of which will be taxed again.
4. Mitt Romney reportedly built a $100M+ IRA with some clever private equity structuring.
When his 2012 tax returns surfaced, the surprise was a SEP IRA worth north of nine figures. Journalists reconstructed the most likely method: max out a self-employed retirement account, use it to buy private equity interests at a low basis, and (most aggressively) make his Bain general partner commitment from the IRA, so carried interest on a much larger pool of capital landed inside the account.
The lesson most people take from these stories is Roth IRAs can be really powerful.
The extra lesson I take from it is that a tax-free wrapper can be worth more when you put your highest-variance asset inside it.
A bond fund in a Roth IRA saves you a little. An asset with high risk and potentially reward is where the wrapper may do its heaviest lifting. If it works, the entire outcome is tax-free. If it doesn't, you were never going to harvest a meaningful loss on it anyway.
Venture may be about as high-variance as you can get. Which may make it, in my opinion, one of the better things you can hold in an account with tax advantages.
Four more things could make this fit better than most people realize:
The illiquidity stops being a cost. USVC offers only partial liquidity, through quarterly tender offers at the board's discretion. In a taxable account, that lockup is a real drawback. In a retirement account, investments are often earmarked for decades from now. You are matching a long-horizon asset to long-horizon money instead of fighting it.
There's no annual tax drag to manage. In a taxable account, any distribution the fund makes is a taxable event in the year it happens. Inside an IRA, what you do inside the account often does not trigger a tax bill.
The fund structure actually works in an IRA. This is the technical part most people never hear. Traditional venture funds are partnerships. They send K-1s, and when an IRA holds a partnership interest, it can pick up unrelated business taxable income which means your retirement account may owe tax and have to file its own return. It~~'s~~ can be an ugly surprise. USVC is a registered fund under the Investment Company Act, so it issues a 1099 rather than a K-1 and sidesteps that problem.
And the dollars could already be sitting there. I’d wager many people reading this make consistent contributions to their IRA and 401k plans. It’s one of the main reasons I helped build USVC in the first place. Now, on SoFi, you can take your contribution and invest in USVC.
A few IRA hacks to consider
Most people may think of an IRA as the account they put a few thousand dollars a year into.
That framing is exactly why most IRAs can stay small.
Smart money moves a different way.
1. Consider rolling an old 401k in.
If you've left a job, the 401k you left behind can usually be rolled into an IRA. Rolling pre-tax 401k dollars into a Traditional IRA isn't a taxable event.
Ask for a direct trustee-to-trustee rollover, not a check mailed to you.
If the money passes through your hands, you're on a 60-day clock to redeploy it and the plan may withhold 20% on the way out.
For most people reading this, that could be a funding source for your next investment. Not this year's contribution, but the balance that's been sitting untouched at a former employer's plan since 2019.
One fair warning: If you do a backdoor Roth every year, be careful here.
Rolling pre-tax 401k dollars into a Traditional IRA creates a pre-tax IRA balance, and that can trigger the pro-rata rule, which makes your future backdoor Roth contributions partially taxable. If that's you, the better move may often be the opposite: leave those dollars inside a 401k or Solo 401k, where they don't contaminate anything.
2. Consider converting a Traditional IRA to Roth IRA
A Roth conversion means moving pre-tax dollars into a Roth and paying ordinary income tax on the converted amount in that year.
It's the move Weschler made, and it's why he wrote a $28 million check to the IRS in 2012.
It’s important to remember that you're taxed on the value at the moment you convert.
Two things that make conversions cheaper:
Doing it in a low-income year like a sabbatical, a job transition, the year you start a company
Doing it before asset growth rather than after.
Good tax planning matters most in the years you're earning least, which is the opposite of what most people may assume.
3. You can move an IRA between platforms.
An IRA isn't married to the brokerage that opened it.
A direct trustee-to-trustee transfer moves it, doesn't create a taxable event, and can be done as often as you want.
One honest caveat specific to this: illiquid holdings don't always transfer in kind. If you buy an interval fund on one platform and later want to move brokerages, expect that position to be the complicated part of the move. Something to know going in rather than discover later.
4. You can have multiple IRAs!
There's no limit on how many IRAs you can have, or how many brokerages you can hold them across.
You do not need to consolidate your retirement accounts to participate in this.
You can open one where you want it, fund it, and leave the rest of your setup exactly where it is.
The annual contribution limit is aggregate across every IRA you own, not per account. Two IRAs doesn't mean two limits, so that's a significant mistake to avoid.
And to be clear, because these two rules get conflated constantly: rollovers and transfers don't count against your annual contribution limit.
You can roll a $200,000 old 401k into an IRA and still make your full contribution that year.
The contribution limit governs new money, not money that was already inside the retirement system.
The part where I tell you the risks
I'm not going to soft-pedal this.
Private companies are illiquid. Valuations don't update in real time the way a stock price does.
Some of these companies, including ones that look unstoppable right now, won't work out.
You can lose everything you put in.
Liquidity is limited to periodic repurchases at the board's discretion, and those are not guaranteed.
Three IRA-specific things to think about before you do this:
Illiquidity and RMDs can collide. If you're holding this in a Traditional IRA and you're anywhere near required minimum distribution age (roughly 73 right now), be careful. RMDs are mandatory in traditional, SEP, and SIMPLE IRAs. Quarterly tender offers are not. Don't put yourself in a position where you're required to withdraw from an account you can't easily sell out of.
I think Roth beats Traditional for this specific bet. If the asset works, you may probably want the growth to be tax-free rather than taxed as ordinary income on the way out decades later. You can do that in a Roth IRA. It is worth thinking about which account you use, not just whether you use one. Talk to a tax pro!
No tax-loss harvesting inside an IRA. Losses in a retirement account are just losses. You can't use them to offset gains elsewhere. That's a genuine tradeoff versus holding this in a taxable account, and it cuts the other way from everything above.
I should also be direct about my position: I'm the Portfolio Manager of USVC and a shareholder. I'm compensated in that role. Read the full disclosure at the bottom, and read the prospectus before you invest anything. This is also not meant to be tax advice. You should seek tax advice from your tax advisor.
What to do if you're interested
Open or fund an IRA at SoFi and buy USVC inside it.
The minimum is $500, and the reduced fee window will only last for the next 60 days!
If you have questions first, feel free to write into [email protected]. My team will get back to you shortly.
I’ll also be doing a live session with the SoFi team walking through how this works inside a retirement account, how the fund is structured, and where these companies come from. Live Q&A at the end.
— Ankur
P.S. If you want to support this launch, please show some love on my announcement posts on LinkedIn and X. A like, comment, or share helps more than you know. Thank you 🙏
P.P.S. The fastest way to get your specific question answered is emailing us at [email protected]. I’ll be manning the inbox with our team, so don’t be surprised if I email you directly.
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. Laws and regulations discussed are subject to change and may not apply to your individual circumstances.
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 (888) 200-4361. Read the prospectus carefully before investing.
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.
SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC .
For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with SoFi Invest please view their fee schedule.
