How can angel investors use a self-directed IRA to invest in startups?
A self-directed IRA allows investors to redirect retirement funds — from either a traditional or Roth IRA — into alternative assets such as startups, real estate, precious metals, or art. When structured as a Roth self-directed IRA, contributions have already been taxed, which means any returns can be reinvested and grown entirely tax-free, creating a powerful vehicle for building long-term and even generational wealth.
Christa Downey took this approach directly: she converted a Roth IRA she had opened years earlier into a self-directed IRA and began deploying it into startup investments. The tax structure of the Roth is particularly attractive for early-stage investing — precisely the asset class where returns, when they come, can be outsized. The same dynamic made this strategy famous through Peter Thiel's use of a Roth IRA to hold his early PayPal shares, a parallel that Marcia Dawood references in her book to illustrate just how dramatically tax-free compounding can multiply startup equity gains.
The self-directed IRA also complements a diversified angel portfolio. Downey invested as a limited partner in three venture funds during her most active period in 2023 and 2024, each deploying capital into dozens of startups — giving her broad exposure across vintages and sectors simultaneously. Using retirement funds through a self-directed IRA is one concrete mechanism that makes this level of diversification accessible to investors who might not have large pools of liquid capital sitting outside their retirement accounts.
If this approach to angel investing through tax-advantaged vehicles interests you, the full episode on Listenly goes deeper on how Downey structured her overall portfolio and mindset around wealth-building.
What is a self-directed IRA?
A self-directed IRA is a retirement account that gives the holder control over a broader range of investment choices beyond traditional stocks and bonds. It can hold alternative assets including startup equity, real estate, precious metals, and art — while preserving the same tax treatment as the underlying account type (traditional or Roth).
"I'm building something amazing and I want you to know about this in case you want to join me — you can have a seat at the table and we can build something amazing together."
— Christa Downey, Angel Investor & Coach, Wealth ReimaginedAbout Christa Downey
Downey's path into angel investing began inside the startup ecosystem surrounding Cornell University in Ithaca, New York, where conversations about early-stage funding first prompted her to ask: could this be for me? Her entry point came through her friend Alyssa Miller, who founded Chloe Capital — a fund with an active accelerator program in New York City — and who pointed her toward books, resources, and Marcia Dawood's podcast to build her foundation. Downey listened to The Angel Next Door from its earliest episodes, treating it as a core part of her investor education. She went on to invest as a limited partner in three venture funds, giving her exposure to a portfolio spanning several dozen startups, and concentrated her direct angel activity heavily across 2023 and 2024. Alongside her investing practice, she coaches founders through the critical leadership shift from visionary to CEO, drawing on her background in nonprofit work and the startup world to address organizational alignment and strategic clarity. Her platform, Wealth Reimagined, reflects her conviction that angel investing — and the tools that support it, including self-directed IRAs — should be accessible to a far broader range of people than typically assume they qualify.
See also
Downey focuses on mission-driven companies, primarily in health tech, climate tech, and wealth-building platforms, often looking for meaningful overlap between these areas.
Downey wrote her first checks across a few small investments at the same time, with the very first one going to The Fourth Effect, a platform centered on social impact.
Downey entered angel investing through the startup community in Ithaca, New York at Cornell University, where she first heard people talk about early-stage funding and began exploring what participating might look like for her.