Trump’s Big News for Your Retirement: Startups in Your 401(k)?

By Matthew Milner, on Wednesday, July 30, 2025

In a move that could reshape the investing landscape, President Trump just signed an order to allow private equity — including startup companies — to be included in your 401(k).

This executive order sent a jolt of electricity through the financial world. (Click on President Trump above to see what the Wall Street Journal has to say about it.)

Meanwhile, here at Crowdability, we believe it might be one of the most exciting developments for investors in over a decade.

But while this news opens the door to enormous opportunity, it also comes with risks.

So today, I’ll explain what this order actually means, what’s at stake, and how you can take advantage of it — without falling into the traps that could sabotage your savings.

What the Order Does — and Doesn’t Do

The executive order encourages regulators to allow private-market investments, including private equity and venture capital, to be included in 401(k) investment options.

This builds on earlier Department of Labor guidance from 2020, but it goes further.

It doesn’t just support funds that focus on areas like large-cap buyouts. It actually opens the door to investing in early-stage private startups, the kind we cover at Crowdability.

In theory, this means your retirement portfolio could include companies like the next OpenAI, Stripe, or SpaceX — long before they go public, so you can potentially capture the biggest gains.

Why This Is So Exciting (Hint: 58% Annual Returns)

Private startups have historically been off-limits to regular investors. Not because they’re too risky — although they can be — but because of SEC rules that limited access to wealthy "accredited" investors.

But the financial returns? They’ve been spectacular:

According to research from the non-profit Kauffman Foundation, over the long run, early-stage startup investing has outperformed every other major asset class.

And according to Cambridge Associates, a financial advisor with clients including the Rockefeller Family and the Bill Gates Foundation, over the last twenty-five years, private startups have delivered annual returns of 58%. That’s six, seven, eight times higher than the stock market.

And yet, until now, if you had a regular job with a 401(k), you were mostly stuck with mutual funds, bonds, and ETFs.

This order changes the game. For the first time, you could have access to the kind of growth opportunities that were once reserved for venture capitalists and Silicon Valley insiders.

But There’s a Catch...

Actually, there are a few. Here they are:

  1. High Fees

Private equity funds typically charge “2 and 20” — that’s 2% of assets under management, plus 20% of the profits. In a 401(k), fees like this can be devastating over time.

  1. Illiquidity

Many of these investments tie up your money for 7 to 10 years or more. That’s OK for some retirement timelines — but a poor fit for savers who need more flexibility.

  1. Lack of Transparency

Unlike public stocks, early-stage startups don’t publish quarterly financials. That makes them harder to evaluate, and easier to overpay for.

  1. Legal Risk for Employers

Because of these issues, employers might be hesitant to include private equity in their 401(k) plans. Even though the order exists, it may take years before most workers see these options in their accounts.

A Better Way: Take Control Yourself

So where does this leave you?

Well, if you're reading this, you already know that, at Crowdability, we believe in a bottom-up approach to private startup investing. You don’t need to wait for a corporate HR department to approve your retirement options.

Thanks to the JOBS Act and the rise of equity crowdfunding, you have the ability to invest in early-stage startups already — with low minimums, full control, and far more transparency than most private-equity funds offer.

Crowdability provides:

  • Curated deal flow from top platforms.
  • Research and ratings to help you understand each opportunity.
  • Education that helps you build a diversified portfolio over time, just like the pros.

That last point is key:

Diversification is the single best way to manage risk in this asset class.

And unlike traditional VC funds that have high minimums and offer limited access, you can start building your own portfolio today with just a few hundred dollars per company.

The Bottom Line

President Trump’s executive order is a powerful signal:

The gates to the private markets are opening. For everyday investors like you, this could be the start of something big.

But don’t wait for Wall Street or Washington to decide how you build wealth.

With the right tools, education, and mindset, you can begin investing in the most exciting early-stage startups today — on your own terms.

And we’re here to help you every step of the way.

Happy Investing

Best Regards,


Founder
Crowdability.com

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