{"id":44338,"date":"2023-10-20T15:35:15","date_gmt":"2023-10-20T15:35:15","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/tapping-the-super-pool-venture-capital-investments-for-self-managed-funds-startupsmart\/"},"modified":"2023-10-20T15:35:15","modified_gmt":"2023-10-20T15:35:15","slug":"tapping-the-super-pool-venture-capital-investments-for-self-managed-funds-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/tapping-the-super-pool-venture-capital-investments-for-self-managed-funds-startupsmart\/","title":{"rendered":"Tapping the super pool: venture capital investments for self-managed funds – StartupSmart"},"content":{"rendered":"
With the exceptional growth rates of self-managed super funds (SMSFs) over the last decade, the sector now has over a million members and controls the largest share of Australian superannuation at $495 billion (as at 30 June 2013).<\/p>\n
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For startup enterprises, this is potentially an extensive pool from which to draw investment. So, can an SMSF invest in startup businesses?<\/p>\n
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In short, an SMSF is free to invest in anything that its trustees feel will allow the fund to grow its pool of investment assets for its members\u2019 retirement.<\/p>\n
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However, there are some restrictions. This is because at the core of all SMSFs is a principle known as the sole purpose test.<\/p>\n
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In essence, this means the fund needs to be maintained for the sole purpose of providing retirement benefits to its members, or to their dependants if a member dies before retirement.<\/p>\n
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As a consequence of this, there are some rules that the ATO puts in place regarding investment that must be considered by SMSFs looking to invest in small unlisted companies (or trusts).<\/p>\n
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In-house assets:<\/b><\/p>\n
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<\/b><\/p>\n <\/b><\/p>\n <\/b><\/p>\n <\/p>\n Acquisition from related parties:<\/b><\/p>\n <\/p>\n <\/p>\n Additionally, an SMSF trustee must have in place an investment strategy for the super fund. This is a written document that outlines how the trustee plans to invest the fund\u2019s money to ultimately provide the members with a retirement benefit. When the trustees put in place this strategy they need to give consideration to:<\/p>\n <\/p>\n <\/p>\n As a result, while an investment into a startup may be appropriate for some SMSFs, the trustees need to consider what level of exposure should be in this area given they can be long-term, higher risk investments which may not offer liquidity for an extended period.<\/p>\n <\/p>\n Ultimately, SMSFs are so popular because they allow control over how their retirement monies are invested. It is therefore up to trustees to consider their objectives and preferences, and invest in a way that they feel comfortable.<\/p>\n <\/p>\n For those looking for an exposure to the higher growth that may come from startup businesses, this is an option, provided a measured approach is taken and trustees are careful not to breach the investment rules.<\/p>\n <\/i><\/p>\n <\/p>\n Darren Withers is head of strategy advice at the<\/i> Elston Group<\/i>.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":" With the exceptional growth rates of self-managed super funds (SMSFs) over the last decade, the sector now has over a<\/p>\n","protected":false},"author":1,"featured_media":59305,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/44338"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=44338"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/44338\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/59305"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=44338"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=44338"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=44338"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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