What is the recommendation on allowable classes of stock within a ROBS funded startup? Would you be able to have convertible notes, warrants, or ‘preferred’ shareholders?
Happy to help! The investment types allowed for a ROBS will be dictated by what is allowed in the underlying qualified retirement account. The Internal Revenue Code (IRC) does not specify which types of investments a retirement account can invest in, only what it cannot invest in. IRC Sections 408 & 4975 prohibits Disqualified Persons from engaging in certain type of transactions (i.e. self dealing). Take a look a those IRC Sections for more clarifications.
I hope that helps!
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