The Untapped $17 Trillion Funding Source Founders Overlook
Raising capital today isn’t just hard, it’s getting harder by the quarter. Valuations are compressing, diligence cycles are stretching, and even great startups are being asked to do more with less.
Venture funding has become a selective game, and the usual fallback - friends and family - isn’t always viable. Even when they want to help, most people don’t have five or six figures in liquid cash lying around.
But what if they didn’t need to?
What if your investors could back you using money they’ve already saved, money that’s just sitting in an account, growing slowly in index funds or cash equivalents? For many founders, the capital they’re looking for isn’t on the sidelines. It’s locked up in retirement accounts. And thanks to a shift in infrastructure, that money is finally within reach.
Why IRA Capital Is a Hidden Opportunity for Startups
Across the U.S., investors hold over $17 trillion in IRAs (at year end 2024); this figure reached $18 trillion in Q2 2025 - yet almost none of it touches the startup ecosystem.
That capital sits mostly in public equities, bonds, and mutual funds, managed by default custodians who rarely offer access to private investments. For founders trying to raise money, it’s as if this enormous pool of capital doesn’t exist.
That’s not just a missed opportunity, it’s a structural blind spot.
Most founders and fund managers don’t realize that IRA investments in startups are not only legal, they’re increasingly common. Through a type of account called a self-directed IRA, investors can allocate retirement savings into private companies, including early-stage startups. But because traditional financial advisors rarely bring it up, this route remains off the radar for both investors and issuers.
For founders, it means that you’re likely overlooking investors who already want to back you, they just don’t know how. A former colleague, an early customer, or a startup mentor might not be able to write a check from their checking account, but they could invest through their IRA. With the right setup, that money can move quickly and compliantly into your raise.
Tapping into this capital opens access to a completely new investor pool - friends, family, angels, even LPs, many of whom already trust you but assumed they couldn’t participate. This is not a workaround, it’s a real expansion of your fundraising universe.
The Challenge: Why Founders Haven’t Used It Until Now
If IRA startup funding is legal and the money is already there, why haven’t more founders used it? Because until recently, the process was a mess.
Historically, raising from IRAs meant navigating a maze of paperwork, compliance rules, and custodial coordination. Founders had to work with specialized IRA custodians, decipher IRS regulations, and wait weeks, sometimes months, for investor funds to clear. Every deal felt like a bespoke transaction. And unless both sides were highly motivated, deals fell apart before the money hit the bank.
Many issuers tried once and never again. Some walked away after realizing the cost and timeline outweighed the capital. Others feared introducing complexity to first-time investors who were already hesitant. Even for experienced angels or LPs, the process felt foreign. For founders, it introduced too much friction in an already stressful raise. For investors, it created uncertainty around whether their retirement funds would be handled correctly.
It wasn’t the concept that failed, it was because the infrastructure wasn’t ready yet.
The idea of using self-directed IRA investing to back startups has always made sense in theory. But the lack of a fast, affordable, compliant workflow made it inaccessible in practice. That’s exactly the friction point Alto set out to eliminate.
How Alto Simplifies Raising from IRAs
Alto is a platform that makes it simple for founders and investors to transact using self-directed IRA investing. What used to take weeks of paperwork and back-and-forth with niche custodians can now happen in days, or sometimes less. The result is that IRA capital is no longer reserved for investors with CPAs and legal teams. It's a viable funding source for real startups, right now.
At the center of this experience is Alto’s Private Raise Portal, an end-to-end capital raising solution designed for a wide range of issuers, including early-stage operators. Here’s how it works:
- Easy setup: You create a deal page in minutes, not weeks. No technical integrations, no custom infrastructure. You simply upload your deal docs, set the terms, and you’re ready to go.
- Compliance and transfer handled: Alto takes care of all the custodial logistics, IRS compliance, document flow, and fund movement. Both you and your investors get step-by-step guidance through the process.
- Fast funding: Once an investor commits, funds typically arrive in your account within two business days, much faster than traditional rollover or check-based processes.
The portal works just as well for a friends and family round as it does for a seed-stage angel syndicate or a VC operator helping a portfolio company unlock new capital. Investors receive a private link to your raise, where they can complete the entire investment using their existing IRA funds.
What used to be a complex and costly workaround is now a clean, scalable workflow; without lawyers, delays, or hidden landmines. Alto has made raising capital from IRA funds finally feel like part of the modern founder toolkit.
Who Benefits Most from IRA-Backed Funding
Raising capital from retirement funds may seem niche, but in practice, it serves some of the most common pain points in startup fundraising. Founders, operators, angels, and even passive investors each benefit in distinct, high-leverage ways.
Let’s break it down:
How to Get Started
If you’re a founder or fund manager and this is the first time you’re hearing about IRA startup funding, the good news is that getting started is simpler than you think. Alto has removed the learning curve and the paperwork pile.
Here’s what the process looks like:
- Set up your raise in Alto’s Private Raise Portal:
Create your account, upload your deal documents, and publish your offering, all in one place. No legal gymnastics, no hidden costs. - Invite investors to participate via IRA:Share a private link to your raise with friends, angels, or LPs. Alto guides them through the investment process, from opening a self-directed IRA investing account to moving funds.
- Track commitments and receive funds:
Watch as investments come in. Alto handles transfers and compliance behind the scenes, and you receive funds, often in just two business days.
You don’t need to reinvent your capital stack. You just need to add a powerful new lane to it. If you’re curious how IRA investments in startups could unlock your next round, book a call to explore how IRA capital can fund your next raise. You can also explore Alto’s private raise portal here.
