Case Study

How Supervest is expanding access to MCA investing with Alto as its preferred IRA provider

Access to IRA capital through easy integration and top-tier customer service made Alto the obvious choice.

Supervest Case Study
Supervest
2021

Relationship Established

4.4

IRA Capital Invested

81672

Investments from IRAs

Company

Supervest offers direct access to investment opportunities
within the small business finance asset class to retail
investors and financial advisors.

Website
Headquarters

New York, NY

Industry

Merchant cash advance investments

Supervest offers investors a unique opportunity to support small businesses while potentially generating strong returns. Through the issuance of merchant cash advances, or MCAs, Supervest provides select businesses with much-needed financing in exchange for a percentage of sales. 

A form of private credit, MCAs have been around for decades. However, you’d be forgiven if you had never heard of them. As with most alternative assets, merchant cash advance investing has historically been limited to a select few. 

That was, until Jeremy Morton and Kris Kehler saw an opportunity to leverage their MCA experience to create a new type of investment platform following a slew of changes to crowdfunding rules over the past decade.

“They really saw a gap in the industry with all the crowdfunding sites and the idea of diversification and democratizing investing."

Prior to Supervest, MCA investments were limited to institutional investors and a handful of merchant cash advance industry operators. And while crowdfunding sites were proliferating, none focused on MCAs.

An Opportunity for Individuals and Businesses Alike

For decades, the 60/40 model—investing about 60% of one’s portfolio in stocks and the remaining 40% in bonds, give or take—was heralded as the gold standard for retail investors. All the while, ultra-wealthy and institutional investors got to invest in a different set of opportunities, like MCAs.

Today, that model looks out of step as a growing number of retail investors question its long-term viability. Alto’s own 2022 Alternative Investment Report bears these concerns: Of the more than 2,000 investors we surveyed, three-quarters said they fear a stock market crash would wipe out their retirement savings.

And they’re looking to alternative assets—once available only to the very few—to increase returns and achieve greater portfolio diversification. But there’s another factor at play: On a more personal level, investors increasingly want to support companies, causes, and industries they care about, which Supervest’s Joseph Sancio says is a unique point of distinction for merchant cash advance investing.

“At the end of the day, merchant cash advances are a necessity to small businesses … Without MCAs, a lot of small businesses wouldn't exist or survive times of tribulation like the ones they have experienced over the last 3 years, for example.”

It was against this backdrop of changes in investor preferences and regulations that Supervest was born, and it didn’t take long for investors to take notice. Since the inception of its first offering in 2021, Supervest users have funded more than 38,000 individual merchant deals to the tune of over $115 million.

Exploring a New Source of Investable Assets

Supervest gives accredited individuals the opportunity to invest in MCAs with as little as $25,000—not an insignificant amount by any means, but well below the hundreds of thousands of dollars (if not more) historically required to participate in these types of offerings.

Still, even many accredited investors don’t have large sums of money on hand to invest, which is where Alto comes in.

Alto was created after its founder, Eric Satz, made a series of investments in private offerings using funds he had in his IRA. His reasoning was sound: Not only are IRAs tax-efficient, they also represent a potentially large source of capital.

However, he found that the process for doing so was complicated and cumbersome—even for someone who had spent his entire working life in finance.

So he set out to fix it, and quickly discovered that not only are there trillions of dollars held in IRAs—most Americans’ investable assets are locked in their retirement accounts. And because these funds can’t be withdrawn at just any time—not without paying tax penalties, anyway—they are a perfect match for alternative assets, many of which are illiquid.

Today, Alto is on a mission to provide all Americans the opportunity to invest in alternatives by streamlining and simplifying the process for making those investments while giving them the opportunity to do so using their retirement dollars. To issuers and investment partners looking for new sources of funding, this is significant.

So when investors inquire about using their IRA to fund their investment, the team at Supervest knows exactly where to point them.

“The ease of use, the flexibility you [Alto] have, and just the overall client service to your customers is massive.”

Given both companies’ commitment to providing access to new investment opportunities backed by excellent customer service, Supervest’s relationship with Alto just makes sense. To date, Alto IRA accounts have contributed more than $4.4 million to Supervest offerings, with an average investment of just over $81,000. 

No wonder Alto has been Supervest’s preferred IRA custodian since the partnership was formed in 2021.

Tap Into IRA Capital with Alto

Like Supervest, you can raise capital from IRA funds, whether it’s a one-time thing or a series of deals. Create your free issuer account today to find out how quick and easy it is to raise IRA capital with Alto.

We can’t wait to see what you build

Raise capital with IRA funds on an offering-by-offering basis.

*Alto does not represent, warrant, or otherwise guarantee the success of an offering on its platform. Issuers are solely responsible for engaging investors and raising capital for offerings uploaded to the Alto platform. Alto will not recommend or otherwise market an offering to its clients.

©  Alto Solutions, Inc.  2024 All Rights Reserved.

Alto Solutions, Inc. d/b/a AltoIRA (Alto) is an administrator of self-directed individual retirement accounts and is not a registered or licensed broker, dealer, broker-dealer, funding portal, cryptocurrency exchange, investment advisor or investment manager. Neither Alto nor any of its affiliates is a bank. Banking services provided to Alto are by BankProv (Bank) Member FDIC / Member DIF. The FDIC insures each account holder up to $250,000 based on deposit insurance rules. The Depositors Insurance Fund (DIF) insures all deposits above the FDIC depositor limit when placed with BankProv. Crypto assets are not insured by the FDIC, may lose value, are not deposits or other obligations of the Bank, and are not guaranteed by the Bank. Alto does not provide investment advice or recommendations about any specific security offering, investment or asset. Investing in start-ups, cryptocurrency, securitized art and other alternative investments involves significant risks. Alto services are intended only for investors who fully understand and are willing to accept the risks associated with alternative investments and the management of self-directed IRAs. Alto does not control or monitor the operation or conduct of third party investment platforms, funds, cryptocurrency exchanges or issuers, or their offerings. Information provided by AltoIRA does not constitute an offer, nor the solicitation of an offer to buy or subscribe to, any securities to any person in any jurisdiction.

Whenever making an investment decision, investors should consult with their tax attorney or financial professional. Investors are responsible for conducting their own due diligence regarding investments, for using their Alto accounts in compliance with law, and for all tax and other risks and obligations arising from account transactions. Alto®, The Alternative IRA®, the Alto logo and Alto CryptoIRA® are trademarks of AltoIRA. All other trademarks are the properties of their respective owners.