Compare the major ways founders fund a new or acquired business, including personal savings, SBA financing, taxable withdrawals, outside equity, and ROBS 401(k) funding through eligible retirement assets.
*Other People's Money
Nexus by Talcott Forge is a modern ROBS product. We also offer broader resources for founders to evaluate other ways to unlock capital and fund your business.
This is a comparison surface, not a recommendation. The right next step depends on the business, timing, tax profile, risk tolerance, and professional advice around your specific facts.
| ROBS | HELOC | SBA Loan | Stock Sale/Loan | OPM | |
|---|---|---|---|---|---|
| Description | Use retirement savings to fund a new C-Corp | Borrow against home equity | Gov't-backed small business loan | Sell or borrow against public/private stock | Raise from investors (other people's money) |
| Equity dilution | None | None | None | None | Yes |
| Tax impact | Tax-deferred rollover structure | Varies | Interest may be deductible | Varies | Generally none |
| Debt created | No | Yes | Yes | Yes (if loan) | No |
| Speed | 2-3 weeks (Nexus) | 1-2 weeks | 4-8 weeks | 1-4+ weeks | 4-8+ weeks |
| Qualifications | $50K+ eligible retirement assets | Home equity | Credit, business plan, underwriting | Stock portfolio / private (pre-IPO) stock | Network + funding-ready business plan |
| Personal risk | Retirement savings at risk | Home equity at risk | Personal guarantee often required | Margin calls, liquidity, private stock eligibility | Loss of control; investors paid first |
Yes, eligible retirement assets can be used to capitalize a business through a ROBS 401(k) structure. Nexus supports ROBS setup and ongoing administration.
ROBS is not just a transfer of cash. It creates a qualified plan, a C-Corp, an employer-stock purchase, and ongoing responsibilities that must be maintained after the business is funded.
Read ROBS explainedROBS is the structure Nexus supports for using eligible retirement assets to fund a C-Corp-backed operating business.
The business can fail, and retirement assets can be lost.
A ROBS-backed company has ongoing plan and corporate obligations.
Annual reporting, valuation records, prohibited-transaction discipline, employee eligibility, and plan operation matter.
IRS materials identify recurring ROBS failure modes, including missed filings, valuation issues, plan operation problems, and business failure.
A readiness check does not replace professional advice, but it helps you find the obvious blockers before a deeper review.
Do you have eligible retirement assets?
Can those assets roll over?
Are you buying or starting an active operating business?
Are you willing to operate through a C-Corp?
Is the capital need large enough to justify setup and ongoing administration?
Have you compared retirement capital against SBA or debt, savings, taxable withdrawal, and equity?
Do you understand the ongoing plan responsibilities?
ROBS, short for Rollover for Business Startups, is a structure that lets you use eligible retirement funds to capitalize a business through a direct rollover structure that preserves the funds’ tax-deferred treatment.
Read the ROBS checklistYes. ROBS arrangements have been in use since the 1970s. They rely on existing provisions of ERISA and the Internal Revenue Code governing qualified retirement plans and investments in qualifying employer stock.
Read ROBS explainedTraditional 401(k), Traditional IRA, 403(b), 457(b), SEP-IRA, SIMPLE IRA, and similar qualified pre-tax retirement accounts typically work. Roth IRAs don't work in a ROBS structure. Retirement balances at your current employer usually can't be used for ROBS until you separate. We can help you figure out what's available.
Use the funding checklistMost founders need at least $50K in eligible retirement funds for ROBS to make economic sense. Below that level, setup and annual administration costs consume too much of the capital. The economics become more attractive once the rollover amount exceeds $100K.
See how Nexus worksA 401(k) plan is only permitted to invest in employer stock that qualifies as "qualifying employer securities" under ERISA 407(d)(5). In practice, that means common or preferred stock of a C-Corp. LLC membership interests, S-Corp stock, and partnership units don't qualify.
Read the C-Corp guideYes, ROBS can usually be combined with an SBA loan, investor capital, or other business financing. Founders often use ROBS funds as part of the equity injection for a larger transaction. The important point is that the financing needs to be structured carefully. The C-Corp should be the borrower, and any personal guarantees, collateral, or related-party terms need to be carefully assessed to avoid compliance issues.
Review prohibited transactionsStart with readiness, then use the deeper Nexus resources to decide whether ROBS belongs in the plan.