Necessity sometimes breeds new trends. When Jim O’Brien and five friends needed more than $500,000 in start-up capital to launch Print Management Partners, a print-design and -distribution company in Des Plaines, Ill. every bank they approached turned them down. But together they were sitting on more than $750,000, which they had built up in their 401(k) plans at their previous employer. To me it seemed so obvious, says O’Brien. Why couldn’t we use some of our retirement funds to pay for our start-up?

It may have seemed obvious, but it wasn’t easy. I spent months asking everybody how we could use our 401(k) money without cashing it in and paying the penalties and taxes, says O’Brien. People told me it couldn’t be done. They were wrong.

In fact, despite often impenetrable government regulations, a growing number of private companies have found innovative ways to tap into both owners’ and employees’ retirement savings to support company growth. When they do so, they’re mimicking a well-established practice among large public companies, which invest 23% of all 401(k) assets in company stock, according to Access Research, a Windsor, Conn. financial- consulting firm. Indeed, company stock represents the largest investment concentration for 401(k)s.

But O’Brien’s company was private, which meant that any investment in it would be less liquid and tougher to value, and therefore potentially much riskier, than public stock. And since Print Management was a start-up, it would appear to be an even riskier investment. It wouldn’t stand much chance of winning approval as a 401(k) investment option from conservative plan administrators and trustees, which are typically banks, brokerages, insurance companies, or mutual-fund houses.

Still, a growing number of small companies have found ways around even the stodgiest of retirement-plan managers. A large private advertising agency paved the course by offering its 401(k) plan participants a onetime election to invest in the agency’s stock, with funds targeted for corporate purposes, says Andrew Ross, a partner at New York City law firm Loeb & Loeb. That technique was a variant of those used by other companies and permitted by the Securities and Exchange Commission in no-action letters.

O’Brien wanted to take the strategy further. He wanted to have access to 401(k) funds during the company’s start-up phase and then continue to have access to them throughout the life of the 401(k). It was a riskier gambit that paid off.

We set up a 401(k) plan that included an employee stock option plan through which company stock could be purchased, explains Greg Brown, Print Management’s lawyer at Chicago law firm Oppenheimer Wolff & Donnelly. Then the company named two of the six owners as the trustees of the 401(k), which meant that their fiduciary responsibilities were to themselves as plan participants. Once the new plan was in place, the partners rolled their old 401(k) accounts into their start-up’s 401(k) plan; from there, they could invest in the new company’s stock or in other investment options typical of 401(k) plans.

It took about four months to set up the plan and figure out how to value the start-up’s stock. Unless Congress eases 401(k) guidelines to make it easier to include private companies’ stock, Print Management’s strategy is costly and time-consuming for other start-ups considering tapping the $675 billion that is currently invested in 401(k) plans. And as the company grows and hires new workers the partners must accept the risk that accompanies the addition of new nonowners in their plan.

Persistence can pay off. We’re at $3.5 million in sales, and we turned profitable within our first four months, says O’Brien. It’s hard to imagine a better investment for our retirement savings.

If you want to explore ways to raise capital for your company through a 401(k) plan, it’s going to take some legwork. One good way to get started is to visit the Web site maintained by HR Investment Consultants. The Baltimore-based firm maintains a comprehensive database of information relating to 401(k) providers (especially those that specialize in small-company plans). While you may not want to sign up for its provider-search service (a tad pricey at $650 for a six-month subscription), the site is worth checking out for its valuable library of recent article extracts relating to 401(k)s as well as for referrals to other useful sources. The firm’s phone number is 800-462-0628.

ACCESS RESEARCH, Jeffrey Close, 8 Griffin Rd. North, Windsor, CT 06095; 860-688-8821 25

LOEB & LOEB, Andrew Ross, 345 Park Ave. New York, NY 10154; 212-407-4800; ara@loeb.com 25

OPPENHEIMER WOLFF & DONNELLY, Greg Brown, 180 N. Stetson Ave. 45th Floor, Chicago, IL 60601-6710; 312-616-1800; gbrown@owdlaw.com 25

PRINT MANAGEMENT PARTNERS, Jim O’Brien, 640 Pearson St. Des Plaines, IL 60016; 847-699-2999 25