WEBVTT 00:00:00.000 --> 00:00:01.820 Okay, I want you to picture something for a second. 00:00:02.080 --> 00:00:05.879 You're in Manhattan. It's a Tuesday morning. 00:00:06.120 --> 00:00:09.660 The air is crisp. You've got your probably overpriced 00:00:09.660 --> 00:00:12.199 coffee in your hand. And you're walking through 00:00:12.199 --> 00:00:14.179 the financial district. You look up and the sun 00:00:14.179 --> 00:00:18.100 is just catching one of those massive glass towers. 00:00:18.359 --> 00:00:21.079 Or, okay, maybe you're at home scrolling through 00:00:21.079 --> 00:00:24.100 Twitter or X or whatever we're calling it this 00:00:24.100 --> 00:00:26.699 week. Right, who knows. And you see a headline 00:00:26.699 --> 00:00:31.750 flash by. New AI startup valued at $20 billion. 00:00:32.789 --> 00:00:35.390 The classic unicorn headlines. Yeah, you see 00:00:35.390 --> 00:00:37.789 them every single week now. Exactly. And you 00:00:37.789 --> 00:00:39.929 look at these things, the skyscraper gleaming 00:00:39.929 --> 00:00:44.289 in the sun, the unicorn startup minting millionaires 00:00:44.289 --> 00:00:47.229 overnight, and this very specific, maybe a little 00:00:47.229 --> 00:00:49.009 cynical thought crosses your mind. I think I 00:00:49.009 --> 00:00:50.310 know where you're going with this. You think, 00:00:50.310 --> 00:00:52.969 wow, somebody is making an absolute killing off 00:00:52.969 --> 00:00:55.429 of this. But then the second thought hits you. 00:00:55.530 --> 00:00:58.429 Right away. That somebody is definitely not me. 00:00:58.710 --> 00:01:01.869 And historically speaking, you were absolutely 00:01:01.869 --> 00:01:04.090 right to think that. I mean, that wasn't you 00:01:04.090 --> 00:01:06.329 being cynical. That was just you being realistic. 00:01:07.109 --> 00:01:09.709 For the better part of the last century, the 00:01:09.709 --> 00:01:14.129 most lucrative assets in the world, we're talking 00:01:14.129 --> 00:01:16.709 prime commercial real estate, pre -IPO venture 00:01:16.709 --> 00:01:19.730 capital, they've been locked behind what I always 00:01:19.730 --> 00:01:22.329 like to call the velvet rope. The VIP section 00:01:22.329 --> 00:01:24.709 of capitalism. Pretty much. No sneakers allowed. 00:01:25.189 --> 00:01:27.670 Precisely. If you wanted to invest in a commercial 00:01:27.670 --> 00:01:30.049 tower or get in on the ground floor of a company 00:01:30.049 --> 00:01:32.629 like, I don't know, OpenAI or Uber before they 00:01:32.629 --> 00:01:34.750 were household names, you essentially needed 00:01:34.750 --> 00:01:38.010 two things. One, you needed millions and millions 00:01:38.010 --> 00:01:40.629 of dollars in capital. Or two, you needed the 00:01:40.629 --> 00:01:43.170 right phone number in your Rolodex. You had to 00:01:43.170 --> 00:01:45.030 be what the Securities and Exchange Commission, 00:01:45.189 --> 00:01:49.079 the SEC, defines as an accredited... Which is 00:01:49.079 --> 00:01:51.599 really just a fancy regulatory way of saying 00:01:51.599 --> 00:01:54.340 rich. It is a regulatory club. And yeah, most 00:01:54.340 --> 00:01:57.620 of us were not on the list. But today we are 00:01:57.620 --> 00:02:00.700 unpacking the story of a company that looked 00:02:00.700 --> 00:02:03.900 at that velvet rope and decided to take a sledgehammer 00:02:03.900 --> 00:02:07.719 to it. We are doing a deep dive into Fundrise. 00:02:08.039 --> 00:02:10.020 Fundrise. I feel like I've definitely seen their 00:02:10.020 --> 00:02:12.000 ads on Instagram. They're the ones with the invest 00:02:12.000 --> 00:02:14.259 in real estate tagline, right? Usually showing 00:02:14.259 --> 00:02:16.039 a nice house or an apartment complex. That's 00:02:16.039 --> 00:02:18.520 how they started, yes. Yeah. But the story is 00:02:18.520 --> 00:02:21.099 so, so much bigger than just an app for buying 00:02:21.099 --> 00:02:23.900 buildings. Right. Fundrise is a fascinating case 00:02:23.900 --> 00:02:29.159 study because it sits right at the violent intersection 00:02:29.159 --> 00:02:31.639 of regulatory change and technological disruption. 00:02:32.710 --> 00:02:35.990 As of 2025, we're looking at a Washington, D 00:02:35.990 --> 00:02:40.110 .C.-based fintech giant. And when you say giant. 00:02:40.250 --> 00:02:42.629 I mean, they're managing roughly $2 .87 billion 00:02:42.629 --> 00:02:46.110 in equity. They've invested in $7 billion worth 00:02:46.110 --> 00:02:48.289 of total assets. Those numbers are staggering. 00:02:48.370 --> 00:02:50.610 Just the sheer weight of that capital is hard 00:02:50.610 --> 00:02:52.430 to get your head around. They are. But, you know, 00:02:52.449 --> 00:02:54.090 the number that really matters to me isn't the 00:02:54.090 --> 00:02:57.129 billions. It's the people. How so? We're talking 00:02:57.129 --> 00:03:00.819 about. Over 350 ,000 individual investors. Wow. 00:03:00.919 --> 00:03:03.240 So not just three guys in a boardroom smoking 00:03:03.240 --> 00:03:05.020 cigars and deciding the fate of a neighborhood. 00:03:05.340 --> 00:03:08.819 Exactly. This is a massive user base of regular 00:03:08.819 --> 00:03:11.800 people. And the mission of this deep dive isn't 00:03:11.800 --> 00:03:13.680 just to look at their balance sheet. We want 00:03:13.680 --> 00:03:18.310 to unpack how two brothers from D .C. utilized 00:03:18.310 --> 00:03:20.969 a specific and frankly kind of obscure change 00:03:20.969 --> 00:03:24.550 in federal law, the JOBS Act, to build a machine 00:03:24.550 --> 00:03:27.750 that allows you, with as little as $10, to own 00:03:27.750 --> 00:03:30.110 pieces of the World Trade Center. Wait, really? 00:03:30.229 --> 00:03:33.550 The World Trade Center? Or... The company's building 00:03:33.550 --> 00:03:35.909 the future of artificial intelligence. It's just 00:03:35.909 --> 00:03:37.870 an incredible journey. I mean, it takes us from 00:03:37.870 --> 00:03:40.969 a single renovated building in D .C. to a financial 00:03:40.969 --> 00:03:43.949 powerhouse backed by the likes of Goldman Sachs 00:03:43.949 --> 00:03:46.289 and J .P. Morgan. It really is. So let's rewind 00:03:46.289 --> 00:03:48.449 the tape. Let's go back to the beginning. Because 00:03:48.449 --> 00:03:50.669 before they were disrupting Wall Street, the 00:03:50.669 --> 00:03:53.050 founders of Fundrise were actually deeply, deeply 00:03:53.050 --> 00:03:55.250 embedded in the world of traditional real estate, 00:03:55.370 --> 00:03:57.110 weren't they? They were. And I think that's a 00:03:57.110 --> 00:03:59.770 crucial distinction. This is not a story of outsiders 00:03:59.770 --> 00:04:02.539 throwing rocks at the castle wall. This is a 00:04:02.539 --> 00:04:05.259 story of insiders unlocking the gate from the 00:04:05.259 --> 00:04:08.860 inside. The founders are Ben and Dan Miller. 00:04:09.639 --> 00:04:12.180 And in the Washington, D .C. real estate world, 00:04:12.319 --> 00:04:14.919 the name Miller carries some serious weight. 00:04:15.039 --> 00:04:17.800 Okay. Why? Who are they? Their father is Herb 00:04:17.800 --> 00:04:20.449 Miller of Western Development Corp. Should that 00:04:20.449 --> 00:04:23.230 name ring a bell for me? If you live in or around 00:04:23.230 --> 00:04:25.290 D .C., absolutely. Even if you don't, you've 00:04:25.290 --> 00:04:27.810 probably seen his work. Herb Miller was a major 00:04:27.810 --> 00:04:30.709 developer. We're talking over 20 million square 00:04:30.709 --> 00:04:33.389 feet of real estate. 20 million! That's a city! 00:04:33.670 --> 00:04:36.470 He developed Georgetown Park, Washington Harbor. 00:04:36.889 --> 00:04:40.069 These are truly iconic locations. So Ben and 00:04:40.069 --> 00:04:42.370 Dan, they didn't grow up talking about baseball 00:04:42.370 --> 00:04:44.480 or video games. No. They grew up speaking the 00:04:44.480 --> 00:04:46.939 language of zoning, financing, cap rates, and 00:04:46.939 --> 00:04:48.339 development right there at the dinner table. 00:04:48.819 --> 00:04:50.899 Ben was actually the president of Western Development, 00:04:51.079 --> 00:04:53.360 and Dan was a managing partner. So they had the 00:04:53.360 --> 00:04:55.819 pedigree. They had the connections. They could 00:04:55.819 --> 00:04:58.180 have easily just kept doing what their dad did, 00:04:58.300 --> 00:05:01.120 you know, call up a bank, get a $50 million loan, 00:05:01.399 --> 00:05:03.680 build a mall, and just count the profits. Why 00:05:03.680 --> 00:05:06.220 bother trying to reinvent the wheel? Why take 00:05:06.220 --> 00:05:08.540 that kind of risk? Because they saw a flaw in 00:05:08.540 --> 00:05:12.139 the model. Or maybe. Maybe they saw a massive 00:05:12.139 --> 00:05:14.720 inefficiency that just bothered them. What was 00:05:14.720 --> 00:05:17.360 it? Traditional development is incredibly capital 00:05:17.360 --> 00:05:21.379 intensive. You are constantly, constantly beholden 00:05:21.379 --> 00:05:23.779 to institutional gatekeepers. The banks. The 00:05:23.779 --> 00:05:26.040 banks. The private equity funds in New York. 00:05:26.060 --> 00:05:28.240 You have to please the loan officer, the guys 00:05:28.240 --> 00:05:31.439 running the big funds. Ben and Dan, they wanted 00:05:31.439 --> 00:05:34.879 to flip that entire model on its head. They had 00:05:34.879 --> 00:05:38.339 this idea. What if we let the community invest 00:05:38.339 --> 00:05:40.600 in their own neighborhoods? So buy -in, literally. 00:05:40.920 --> 00:05:44.100 Literally. They had this belief that if the people 00:05:44.100 --> 00:05:46.439 who live near development actually owned a piece 00:05:46.439 --> 00:05:48.480 of it, the project would be more successful. 00:05:48.920 --> 00:05:51.660 Think about it. If you own a small stake in the 00:05:51.660 --> 00:05:53.480 coffee shop building down the street. I'm going 00:05:53.480 --> 00:05:55.199 to my coffee shop every morning. Where are you 00:05:55.199 --> 00:05:57.100 going to buy your morning latte? Yeah, it creates 00:05:57.100 --> 00:05:59.639 a loyalty loop. Exactly. It creates a stickiness 00:05:59.639 --> 00:06:02.639 that traditional capital just can't buy. So they 00:06:02.639 --> 00:06:04.899 decided to test this theory out. And this brings 00:06:04.899 --> 00:06:07.060 us to their patient zero, right? A project called 00:06:07.060 --> 00:06:10.300 Makedo. Makedo. It's a really cool spot, actually. 00:06:10.319 --> 00:06:13.060 A communal marketplace in the H Street NE corridor 00:06:13.060 --> 00:06:16.529 in Washington, D .C. You've got retail, a restaurant, 00:06:16.649 --> 00:06:19.069 a cafe, all mixed together. Okay. Now, usually, 00:06:19.189 --> 00:06:21.689 to fund something like this, a developer walks 00:06:21.689 --> 00:06:23.970 into a bank with a binder, you know, the size 00:06:23.970 --> 00:06:26.250 of a phone book, full of spreadsheets. Right. 00:06:26.350 --> 00:06:28.310 But the Millers did something radical for the 00:06:28.310 --> 00:06:32.310 time, and we're talking 2010, 2011 here. They 00:06:32.310 --> 00:06:34.089 decided to open the investment up to the people. 00:06:34.250 --> 00:06:36.149 And when we say people, we're not talking about 00:06:36.149 --> 00:06:38.660 hedge fund managers from Connecticut. No. We 00:06:38.660 --> 00:06:41.259 mean regular residents, neighbors, people on 00:06:41.259 --> 00:06:45.480 the street. They raised $325 ,000 from 175 individual 00:06:45.480 --> 00:06:48.399 investors. That's pretty cool. But the key metric 00:06:48.399 --> 00:06:51.079 here, the thing that really made headlines, was 00:06:51.079 --> 00:06:53.120 the minimum investment. How low did they go? 00:06:53.639 --> 00:06:56.980 Any resident. of dc or virginia could invest 00:06:56.980 --> 00:07:01.759 for as little as 100 100 that is literally less 00:07:01.759 --> 00:07:04.439 than a nice dinner out in washington dc it was 00:07:04.439 --> 00:07:06.220 unheard of yeah i mean you have to understand 00:07:06.220 --> 00:07:08.680 in real estate private equity the minimum ticket 00:07:08.680 --> 00:07:12.319 size is usually 50 000 100 000 sometimes a quarter 00:07:12.319 --> 00:07:14.060 of a million dollars just to get in the door 00:07:14.060 --> 00:07:16.860 to drop it to a hundred dollars that completely 00:07:16.860 --> 00:07:19.879 changed the physics of the deal It democratized 00:07:19.879 --> 00:07:22.079 the asset class in a way that had never, ever 00:07:22.079 --> 00:07:24.199 been done before in the U .S. But wait a minute. 00:07:24.259 --> 00:07:27.180 Doing this in 2010, that couldn't have been easy, 00:07:27.319 --> 00:07:29.160 right? I mean, you couldn't just put a donate 00:07:29.160 --> 00:07:31.620 here button on a website and call it investing. 00:07:31.899 --> 00:07:34.480 The SEC usually frowns on that. Crowns on it 00:07:34.480 --> 00:07:37.000 is putting it very, very mildly. The SEC would 00:07:37.000 --> 00:07:39.740 usually shut that down in a heartbeat and slap 00:07:39.740 --> 00:07:42.500 you with a massive fine. Right. And that is why 00:07:42.500 --> 00:07:45.600 the timeline here is so critical. Fundrise was 00:07:45.600 --> 00:07:48.860 founded in 2010 and launched in 2012. This was 00:07:48.860 --> 00:07:51.220 right before the entire regulatory landscape 00:07:51.220 --> 00:07:53.959 shifted beneath everyone's feet. So they were 00:07:53.959 --> 00:07:56.040 ahead of the curve. They were effectively hacking 00:07:56.040 --> 00:07:59.259 the existing system to make Miketo work. They 00:07:59.259 --> 00:08:02.360 were navigating a complete minefield of securities 00:08:02.360 --> 00:08:05.560 regulations. They had to file mountains and mountains 00:08:05.560 --> 00:08:08.819 of paperwork just to take that $100 from a neighbor. 00:08:08.959 --> 00:08:10.860 But they were betting on something. They were 00:08:10.860 --> 00:08:12.560 betting on a change that was coming down the 00:08:12.560 --> 00:08:16.019 pipeline. The JOBS Act. The Jumpstart Our Business 00:08:16.019 --> 00:08:19.300 Startups Act. Okay, let's unpack this. Because 00:08:19.300 --> 00:08:21.420 I know securities regulation sounds incredibly 00:08:21.420 --> 00:08:24.319 dry -like, my eyes are glazing over just saying 00:08:24.319 --> 00:08:28.079 the words. But in this specific case, it was 00:08:28.079 --> 00:08:30.600 the magic wand that made the entire Fundrise 00:08:30.600 --> 00:08:33.960 business model possible. What exactly did the 00:08:33.960 --> 00:08:37.419 JOBS Act do? So to really understand why this 00:08:37.419 --> 00:08:40.039 matters, you have to go back to the 1930s. Okay. 00:08:40.460 --> 00:08:42.860 After the Great Depression. the stock market 00:08:42.860 --> 00:08:46.419 crash, the SEC created very, very strict rules 00:08:46.419 --> 00:08:50.059 to protect people. They basically said, grandma 00:08:50.059 --> 00:08:52.019 shouldn't be allowed to bet her life savings 00:08:52.019 --> 00:08:54.399 on some sketchy private company. Which makes 00:08:54.399 --> 00:08:56.519 sense. They wanted to prevent fraud. Exactly. 00:08:56.779 --> 00:08:58.740 So they created this concept of the accredited 00:08:58.740 --> 00:09:01.100 investor. The VIP list we talked about earlier. 00:09:01.259 --> 00:09:03.860 Right. And to be accredited, you generally need 00:09:03.860 --> 00:09:06.480 a net worth of over a million dollars. And that 00:09:06.480 --> 00:09:09.240 excludes your primary home or an annual income 00:09:09.240 --> 00:09:12.399 of over $200 ,000. So a pretty high bar. Very 00:09:12.399 --> 00:09:15.440 high. If you didn't meet that bar, you were legally 00:09:15.440 --> 00:09:17.360 banned from investing in these private deals. 00:09:17.799 --> 00:09:20.500 The government was essentially saying, you aren't 00:09:20.500 --> 00:09:22.399 rich enough to understand the risk involved here. 00:09:22.620 --> 00:09:25.179 Which is, it's kind of patronizing, isn't it? 00:09:25.220 --> 00:09:27.940 You're too poor to handle this opportunity, so 00:09:27.940 --> 00:09:30.320 we're going to protect you by keeping you poor. 00:09:30.580 --> 00:09:32.600 There's definitely a paternalistic element to 00:09:32.600 --> 00:09:35.860 it, for sure. But the argument was always consumer 00:09:35.860 --> 00:09:40.049 protection. However, by 2012... You know, the 00:09:40.049 --> 00:09:42.289 economy was still clawing its way back from the 00:09:42.289 --> 00:09:45.570 2008 crash. Small businesses couldn't get loans. 00:09:46.250 --> 00:09:49.250 Startups were starved for capital. So the JOBS 00:09:49.250 --> 00:09:52.110 Act was signed. It recognized that this old rule 00:09:52.110 --> 00:09:54.549 was choking off a vital source of capital for 00:09:54.549 --> 00:09:56.889 the economy. So what did it change? Specifically, 00:09:57.009 --> 00:09:59.070 the provisions regarding equity crowdfunding 00:09:59.070 --> 00:10:02.690 created a new, streamlined process. It allowed 00:10:02.690 --> 00:10:04.889 companies to raise capital from the general public, 00:10:05.029 --> 00:10:07.590 from the non -accredited investors, without the 00:10:07.590 --> 00:10:10.389 crushing burden and expense of doing a full -blown 00:10:10.389 --> 00:10:12.970 IPO. So it basically said you don't have to be 00:10:12.970 --> 00:10:14.950 a millionaire to invest in a private company, 00:10:15.070 --> 00:10:16.909 and you don't have to be a massive public corporation 00:10:16.909 --> 00:10:19.529 to accept money from regular people. In a nutshell, 00:10:19.690 --> 00:10:22.610 yes. It was a massive deregulation effort. And 00:10:22.610 --> 00:10:25.419 Fundrise was positioned perfectly to ride. This 00:10:25.419 --> 00:10:27.460 new wave. They had the platform ready to go. 00:10:27.559 --> 00:10:29.320 They had the platform. They had the proof of 00:10:29.320 --> 00:10:31.940 concept with Miketo. And now, finally, they had 00:10:31.940 --> 00:10:34.419 the law on their side. And they did not waste 00:10:34.419 --> 00:10:36.700 any time. They went from that little local shop 00:10:36.700 --> 00:10:39.320 on H Street to one of the most iconic addresses 00:10:39.320 --> 00:10:42.240 in the entire world. Three World Trade Center. 00:10:42.440 --> 00:10:45.039 This was the moment. This was when Fundrise graduated 00:10:45.039 --> 00:10:48.360 from being an interesting local experiment to 00:10:48.360 --> 00:10:51.740 a national player. In January 2015, they announced 00:10:51.740 --> 00:10:54.039 a deal involving the construction of the third 00:10:54.039 --> 00:10:56.399 tallest tower at the World Trade Center site 00:10:56.399 --> 00:11:00.240 in Lower Manhattan. That is a huge leap. I mean, 00:11:00.259 --> 00:11:03.059 we're talking about a multi -billion dollar project, 00:11:03.320 --> 00:11:06.080 one of the most scrutinized, most symbolic construction 00:11:06.080 --> 00:11:08.860 sites on Earth. How does a crowdfunding app get 00:11:08.860 --> 00:11:11.000 involved in that? They did it by offering tax 00:11:11.000 --> 00:11:13.639 -free bonds. Fundrise purchased a $5 million 00:11:13.639 --> 00:11:16.059 slice of the bonds used for the financing of 00:11:16.059 --> 00:11:18.200 the project. Okay. They then took $2 million 00:11:18.200 --> 00:11:20.470 of that slice. and offered it directly to their 00:11:20.470 --> 00:11:23.049 users on the platform. And again, I have to ask, 00:11:23.149 --> 00:11:26.169 was the buy -in accessible? Or was this for the 00:11:26.169 --> 00:11:29.850 big fish? $5 ,000. You could buy a bond for $5 00:11:29.850 --> 00:11:34.529 ,000, and it offered a 5 % tax -free gross annual 00:11:34.529 --> 00:11:38.769 return for five years. That is just wild. Owning 00:11:38.769 --> 00:11:40.350 a bond in the World Trade Center construction 00:11:40.350 --> 00:11:42.769 for five grand? I mean, imagine the bragging 00:11:42.769 --> 00:11:45.509 rights at a dinner party. Well, that tower over 00:11:45.509 --> 00:11:48.129 there, yeah, I helped finance that. It was a 00:11:48.129 --> 00:11:50.730 marketing coup. It generated massive publicity. 00:11:51.009 --> 00:11:53.029 And more importantly, it shared that this model 00:11:53.029 --> 00:11:55.649 wasn't just for renovating a coffee shop. It 00:11:55.649 --> 00:11:57.549 could be a legitimate part of the capital stack 00:11:57.549 --> 00:12:01.549 for skyscrapers. Capital stack. OK, there's a 00:12:01.549 --> 00:12:03.009 term we should probably define for the listener 00:12:03.009 --> 00:12:05.509 who doesn't spend their weekends reading Investopedia. 00:12:05.529 --> 00:12:08.190 Right. So think of funding a big building like 00:12:08.190 --> 00:12:10.789 a layer cake. The bottom layer, the biggest layer, 00:12:10.870 --> 00:12:13.289 is usually a big bank loan. That's the cheapest 00:12:13.289 --> 00:12:15.470 money, the senior debt. Safest. The safest, yes. 00:12:15.889 --> 00:12:18.659 Then you have layers of... equity on top money 00:12:18.659 --> 00:12:21.580 from investors that is riskier but offers much 00:12:21.580 --> 00:12:24.179 higher returns if things go well. Fundrise was 00:12:24.179 --> 00:12:26.399 inserting itself into that stack, proving that 00:12:26.399 --> 00:12:28.480 the crowd could sit right alongside the big banks 00:12:28.480 --> 00:12:30.500 and the institutional players. And speaking of 00:12:30.500 --> 00:12:32.820 capital, Fundrise wasn't just raising money for 00:12:32.820 --> 00:12:34.379 buildings at this point. They were raising money 00:12:34.379 --> 00:12:36.860 for themselves, right? To build the tech, to 00:12:36.860 --> 00:12:39.080 hire the team, to keep the lights on. Correct. 00:12:39.220 --> 00:12:42.379 And their Series A funding round was, for the 00:12:42.379 --> 00:12:46.740 time. Record breaking. They raised $38 million. 00:12:47.460 --> 00:12:50.399 $38 million. At the time, that was more than 00:12:50.399 --> 00:12:52.659 any other crowdfunding company had ever raised. 00:12:52.860 --> 00:12:55.440 It wasn't even close. Who was putting up that 00:12:55.440 --> 00:12:57.820 kind of cash for a model that was still pretty 00:12:57.820 --> 00:13:00.480 new? It was a very interesting and very strategic 00:13:00.480 --> 00:13:03.740 mix. The round was led by a company called Renren. 00:13:04.139 --> 00:13:06.799 Renren, the Chinese social networking company. 00:13:07.879 --> 00:13:10.259 The Facebook of China. That's the one. Ren Ren 00:13:10.259 --> 00:13:13.399 invested $31 million of that $38 million total. 00:13:13.679 --> 00:13:16.980 That seems a little random. Why would a Chinese 00:13:16.980 --> 00:13:19.639 social media company want to invest in a D .C. 00:13:19.679 --> 00:13:22.360 real estate platform? It seems random now, but 00:13:22.360 --> 00:13:25.340 at the time, Chinese tech giants were aggressively 00:13:25.340 --> 00:13:28.759 diversifying into global fintech. They saw the 00:13:28.759 --> 00:13:30.980 potential of this model maybe even before a lot 00:13:30.980 --> 00:13:33.019 of U .S. venture firms did. So they saw the future. 00:13:33.299 --> 00:13:36.320 But what's just as crucial is who else was in 00:13:36.320 --> 00:13:39.460 that round? They had heavy hitters from the U 00:13:39.460 --> 00:13:41.940 .S. real estate and finance world. Guggenheim 00:13:41.940 --> 00:13:45.059 Partners invested. A huge name. A huge name. 00:13:45.159 --> 00:13:46.840 You had executives from Rockrose Development 00:13:46.840 --> 00:13:50.159 and Forest City Enterprises, two massive real 00:13:50.159 --> 00:13:52.220 estate players. So you have the big tech money 00:13:52.220 --> 00:13:54.620 from Renren, and then you have the establishment 00:13:54.620 --> 00:13:57.740 money from Guggenheim and Rockrose. That is a 00:13:57.740 --> 00:14:01.019 powerful seal of approval. It was total institutional 00:14:01.019 --> 00:14:04.220 validation. It told the entire market, this isn't 00:14:04.220 --> 00:14:08.299 just a toy, this is real. By February 2015, they 00:14:08.299 --> 00:14:10.720 had commitments for another $100 million from 00:14:10.720 --> 00:14:12.700 institutional investors to put into their real 00:14:12.700 --> 00:14:15.019 estate offerings. They were flush with cash, 00:14:15.139 --> 00:14:16.940 and they were ready to scale up. And scaling 00:14:16.940 --> 00:14:19.159 meant inventing something new, because buying 00:14:19.159 --> 00:14:21.399 a specific bond for a specific building is cool, 00:14:21.639 --> 00:14:24.110 but... It's hard to build a diversified portfolio 00:14:24.110 --> 00:14:26.529 that way, right? If I, the user, have to pick 00:14:26.529 --> 00:14:28.529 every single building I want to invest in, that 00:14:28.529 --> 00:14:30.669 takes a lot of time and research. Precisely. 00:14:30.669 --> 00:14:33.210 And that friction that I have to read 50 documents 00:14:33.210 --> 00:14:36.629 just to buy one bond problem led directly to 00:14:36.629 --> 00:14:39.610 their biggest innovation yet, the ERIC. The Electronic 00:14:39.610 --> 00:14:42.129 Real Estate Investment Trust. Launched in December 00:14:42.129 --> 00:14:45.269 2015, this was the world's first ever online 00:14:45.269 --> 00:14:48.440 REIT. And it was launched under Regulation A 00:14:48.440 --> 00:14:51.000 plus C, which is a specific part of the Joe B 00:14:51.000 --> 00:14:54.080 .S. Act that allows for even larger capital raises 00:14:54.080 --> 00:14:56.519 from the public. How did this change the user 00:14:56.519 --> 00:14:58.820 experience? What did it do for me as an investor? 00:14:59.159 --> 00:15:01.620 It simplified it dramatically. Instead of picking 00:15:01.620 --> 00:15:03.960 one single building, you just put your money 00:15:03.960 --> 00:15:06.440 into the Arrette. The Arrette then goes out and 00:15:06.440 --> 00:15:08.539 buys a whole portfolio of properties all across 00:15:08.539 --> 00:15:10.960 the United States. And the minimum investment, 00:15:11.080 --> 00:15:14.889 it dropped to just $1 ,000. So for $1 ,000, I'm 00:15:14.889 --> 00:15:17.070 instantly diversified across commercial real 00:15:17.070 --> 00:15:19.750 estate nationwide. It's kind of like a mutual 00:15:19.750 --> 00:15:22.409 fund, but for buildings. That's the perfect analogy. 00:15:22.649 --> 00:15:24.470 And the demand was immediate and overwhelming. 00:15:24.809 --> 00:15:28.070 The first E -Rite had a $50 million offering 00:15:28.070 --> 00:15:31.110 cap. They launched a second one in February 2016. 00:15:31.649 --> 00:15:35.110 By December of 2016, their income E -Rite became 00:15:35.110 --> 00:15:37.570 the first company to ever raise the maximum $50 00:15:37.570 --> 00:15:40.389 million allowed under Regulation A. So they were 00:15:40.389 --> 00:15:42.809 maxing out what the law literally allowed them 00:15:42.809 --> 00:15:45.029 to do. They were pushing the limits of the regulation, 00:15:45.250 --> 00:15:48.029 quite literally. They were proving that the retail 00:15:48.029 --> 00:15:50.909 investor had an appetite for this product that 00:15:50.909 --> 00:15:53.110 Wall Street had just completely underestimated 00:15:53.110 --> 00:15:55.529 for decades. And then they kept expanding on 00:15:55.529 --> 00:15:58.610 this idea. In 2017, they launched the e -fund. 00:15:58.889 --> 00:16:01.389 Yep, the e -fund. How is an e -fund different 00:16:01.389 --> 00:16:04.409 from an array? They sound similar. They do, but 00:16:04.409 --> 00:16:06.809 they had a different focus. The EREITs were mostly 00:16:06.809 --> 00:16:09.509 focused on commercial assets or income generating 00:16:09.509 --> 00:16:12.330 properties, things like shopping centers, apartment 00:16:12.330 --> 00:16:14.210 complexes that already existed and were paying 00:16:14.210 --> 00:16:18.149 rent. OK. Stable income. Exactly. The E -funds, 00:16:18.149 --> 00:16:20.289 like their first one, the Los Angeles E -fund, 00:16:20.450 --> 00:16:24.169 were focused on for sale housing. in major cities. 00:16:24.250 --> 00:16:26.669 So developing new housing stock, building from 00:16:26.669 --> 00:16:29.389 the ground up. They also introduced robo advisor 00:16:29.389 --> 00:16:32.190 services around this time, helping users allocate 00:16:32.190 --> 00:16:34.210 their money based on their goals. You know, do 00:16:34.210 --> 00:16:36.190 you want income now or do you want growth later? 00:16:36.309 --> 00:16:38.049 It sounds like everything was just going up and 00:16:38.049 --> 00:16:40.759 to the right. A perfect startup story. But as 00:16:40.759 --> 00:16:42.879 we know, every startup has its growing pains 00:16:42.879 --> 00:16:45.840 or in some cases, full blown drama. And Fundrise 00:16:45.840 --> 00:16:49.080 hit a massive snag in 2016. They did. It was 00:16:49.080 --> 00:16:52.399 a very significant internal conflict that spilled 00:16:52.399 --> 00:16:54.940 into the public eye. And honestly, it could have 00:16:54.940 --> 00:16:56.919 killed the company right then and there. Wow. 00:16:57.139 --> 00:17:01.480 What happened? In February 2016, Fundrise terminated 00:17:01.480 --> 00:17:04.099 their chief financial officer and a senior accountant. 00:17:04.400 --> 00:17:08.640 Whoa. Firing the CFO is never a small deal. That's 00:17:08.640 --> 00:17:10.059 the person who knows where all the money is. 00:17:10.180 --> 00:17:12.640 That's the person signing off on the books. What 00:17:12.640 --> 00:17:15.200 happened? Well, depends on who you asked at the 00:17:15.200 --> 00:17:17.380 time. Yeah. There were two very different stories. 00:17:17.740 --> 00:17:20.539 The company alleged that the CFO attempted to 00:17:20.539 --> 00:17:23.240 extort over $1 million from the enterprise. Extort. 00:17:23.380 --> 00:17:25.480 They claimed he was basically holding the company 00:17:25.480 --> 00:17:28.119 hostage. That's like a movie plot. And what was 00:17:28.119 --> 00:17:30.279 his side of the story? What did he say? He denied 00:17:30.279 --> 00:17:33.019 the extortion claims entirely. He claimed that 00:17:33.019 --> 00:17:34.900 his termination was retaliation because he had 00:17:34.900 --> 00:17:37.019 reported what he called serious fraudulent behavior 00:17:37.019 --> 00:17:40.180 within the company. That is the F word that no 00:17:40.180 --> 00:17:42.579 financial company ever wants to hear, fraud, 00:17:42.859 --> 00:17:46.500 especially not in fintech. It is a nuclear accusation. 00:17:46.619 --> 00:17:48.759 You have to remember the context fintech was 00:17:48.759 --> 00:17:51.299 booming, but everyone was terrified of another 00:17:51.299 --> 00:17:54.200 Enron or another Madoff situation. Of course. 00:17:54.460 --> 00:17:56.539 Especially with a new model like crowdfunding. 00:17:56.640 --> 00:17:59.799 If investors lose trust, the platform evaporates 00:17:59.799 --> 00:18:02.460 overnight. It's a confidence game. At its core. 00:18:02.660 --> 00:18:06.000 So what did Fundrise do? They knew this. So they 00:18:06.000 --> 00:18:08.200 immediately hired an outside independent audit 00:18:08.200 --> 00:18:11.119 firm to come in and investigate all the allegations. 00:18:11.480 --> 00:18:14.259 And what did the audit find? The firm went through 00:18:14.259 --> 00:18:17.059 everything and concluded that there was no reasonable 00:18:17.059 --> 00:18:20.299 basis for the fraud allegations. OK, so the independent 00:18:20.299 --> 00:18:23.549 audit cleared them completely. It did. And while 00:18:23.549 --> 00:18:26.869 it was a very tumultuous moment for them, it's 00:18:26.869 --> 00:18:29.109 actually a really important part of their history. 00:18:29.750 --> 00:18:31.930 FinTech companies love that motto, move fast 00:18:31.930 --> 00:18:34.289 and break things, right? That's the Silicon Valley 00:18:34.289 --> 00:18:36.549 mantra. But when you are dealing with people's 00:18:36.549 --> 00:18:39.269 life savings, you cannot break things. You need 00:18:39.269 --> 00:18:42.250 rigorous governance. Surviving that scandal, 00:18:42.509 --> 00:18:44.849 submitting to a third -party audit, and coming 00:18:44.849 --> 00:18:47.730 out clean, it likely strengthened their internal 00:18:47.730 --> 00:18:51.150 controls and, ironically, proved their resilience 00:18:51.150 --> 00:18:53.619 to the market. It's the classic trial by fire. 00:18:53.700 --> 00:18:56.099 If you can survive an internal coup and a public 00:18:56.099 --> 00:18:58.220 fraud accusation, you can probably survive a 00:18:58.220 --> 00:19:00.759 tough market. You'd hope so. So they survived 00:19:00.759 --> 00:19:04.660 2016. They have the arids humming along. But 00:19:04.660 --> 00:19:07.359 the real estate market is always changing. And 00:19:07.359 --> 00:19:10.960 around 2021, Fundrise makes another massive pivot. 00:19:11.119 --> 00:19:13.980 They stopped looking at office towers and started 00:19:13.980 --> 00:19:16.400 looking at suburban driveways. The Sunbelt Strategy. 00:19:16.920 --> 00:19:18.819 This is where Fundrise really demonstrated their 00:19:18.819 --> 00:19:22.240 ability to analyze macroeconomic data and shift 00:19:22.240 --> 00:19:25.019 their massive ship accordingly. It's one thing 00:19:25.019 --> 00:19:27.759 to have a good idea. It's another to adapt. So 00:19:27.759 --> 00:19:29.660 what did they see in the data that made them 00:19:29.660 --> 00:19:32.200 change core so dramatically? They saw the donut 00:19:32.200 --> 00:19:34.119 effect happening before it was even really a 00:19:34.119 --> 00:19:36.839 mainstream term. The donut effect. I'm hungry, 00:19:37.000 --> 00:19:38.839 but I'm assuming we aren't talking about pastries 00:19:38.839 --> 00:19:41.759 here. Unfortunately not. It's when the city center, 00:19:41.920 --> 00:19:44.680 the downtown core, hollows out and the suburbs 00:19:44.680 --> 00:19:48.190 around it get fat. Ah, okay. They saw the huge 00:19:48.190 --> 00:19:51.029 demographic shift. Millennials were aging into 00:19:51.029 --> 00:19:53.509 their prime home -buying years, but they were 00:19:53.509 --> 00:19:55.630 completely priced out of the big coastal cities. 00:19:56.549 --> 00:19:58.329 Simultaneously, remote work was beginning to 00:19:58.329 --> 00:20:00.329 untether people from expensive places like New 00:20:00.329 --> 00:20:02.210 York and San Francisco. People were leaving. 00:20:02.230 --> 00:20:04.349 People were leaving and moving to the Sunbelt 00:20:04.349 --> 00:20:07.450 places like Texas, Florida, the Carolinas, looking 00:20:07.450 --> 00:20:10.069 for more space and more affordability. So Fundrise 00:20:10.069 --> 00:20:12.450 decides we need to own the houses these people 00:20:12.450 --> 00:20:14.710 are renting. Exactly. They moved aggressively 00:20:14.710 --> 00:20:17.250 into single family home development and these 00:20:17.250 --> 00:20:20.289 new build to rent communities. Yeah. But to do 00:20:20.289 --> 00:20:24.029 this at scale, I mean, to build thousands and 00:20:24.029 --> 00:20:26.950 thousands of homes, they needed more than just 00:20:26.950 --> 00:20:28.829 crowd capital. They needed serious leverage. 00:20:29.029 --> 00:20:30.970 And this is where the names on the partners list 00:20:30.970 --> 00:20:33.210 get really, really big. This is where they level 00:20:33.210 --> 00:20:37.390 up. In 2021. Fundrise received $300 million in 00:20:37.390 --> 00:20:40.549 credit from Goldman Sachs to invest in developing 00:20:40.549 --> 00:20:43.009 single -family homes in the Sunbelt. Goldman 00:20:43.009 --> 00:20:45.690 Sachs. So that is not a small crowdfunding player 00:20:45.690 --> 00:20:47.789 anymore. That is the establishment giving its 00:20:47.789 --> 00:20:50.789 blessing. It is. And then you fast forward to 00:20:50.789 --> 00:20:56.170 March 2024, and they secured a massive $770 million 00:20:56.170 --> 00:20:59.269 credit facility from J .P. Morgan to expand that 00:20:59.269 --> 00:21:02.269 exact same strategy. So wait. Let's just pause 00:21:02.269 --> 00:21:04.269 on the significance of this for a moment. You 00:21:04.269 --> 00:21:06.769 have a platform that was built to disrupt the 00:21:06.769 --> 00:21:09.250 banks, to go around the banks, now taking over 00:21:09.250 --> 00:21:11.509 a billion dollars in credit from the biggest 00:21:11.509 --> 00:21:13.910 banks on Wall Street. It is a fascinating evolution, 00:21:14.150 --> 00:21:17.589 isn't it? It signals a huge shift from Fundrise 00:21:17.589 --> 00:21:20.390 the Experiment to Fundrise the Institutional 00:21:20.390 --> 00:21:24.089 Asset Manager. Goldman and J .P. Morgan do not 00:21:24.089 --> 00:21:26.690 hand out credit facilities of that size for fun. 00:21:26.769 --> 00:21:30.140 No. unbelievably rigorous due diligence teams. 00:21:30.400 --> 00:21:34.059 It implies a deep, deep level of trust in Fundrise's 00:21:34.059 --> 00:21:37.480 ability to identify good assets, manage them 00:21:37.480 --> 00:21:40.519 effectively, and generate returns. It validates 00:21:40.519 --> 00:21:43.359 their entire Sunbelt thesis. And it creates this 00:21:43.359 --> 00:21:45.799 kind of hybrid model, the equity, the down payment, 00:21:45.960 --> 00:21:47.799 essentially, that comes from the crowd, from 00:21:47.799 --> 00:21:49.940 regular folks like you and me. But the debt, 00:21:50.059 --> 00:21:52.380 the... big mortgage that comes from Wall Street's 00:21:52.380 --> 00:21:54.819 biggest players. Precisely. And that combination 00:21:54.819 --> 00:21:57.940 allows them to scale so much faster than if they 00:21:57.940 --> 00:22:00.380 were relying on the crowd for 100 % of the capital 00:22:00.380 --> 00:22:02.839 stack. It's like capital stack 2 .0. Now, speaking 00:22:02.839 --> 00:22:05.900 of banks, we saw a very weird economic moment 00:22:05.900 --> 00:22:09.759 in 2023. Interest rates skyrocketed. The banks 00:22:09.759 --> 00:22:12.599 all got scared and stopped lending. And Fundrise 00:22:12.599 --> 00:22:15.759 saw another opening. They did. This led to the 00:22:15.759 --> 00:22:18.460 Opportunistic Credit Fund, which they launched 00:22:18.460 --> 00:22:22.119 in January 2023. What was the opportunity? Well, 00:22:22.160 --> 00:22:24.220 you have to remember the context. The Federal 00:22:24.220 --> 00:22:26.240 Reserve was hiking rates faster than they had 00:22:26.240 --> 00:22:29.200 in decades to fight inflation. Traditional banks 00:22:29.200 --> 00:22:31.279 were tightening their belts, refusing to lend 00:22:31.279 --> 00:22:33.759 for new development projects because they were 00:22:33.759 --> 00:22:35.440 worried about their own balance sheets. So you 00:22:35.440 --> 00:22:37.460 had all these developers who needed money and 00:22:37.460 --> 00:22:39.920 the banks were saying no. And Fundrise stepped 00:22:39.920 --> 00:22:43.099 in and said yes. They launched a fund specifically 00:22:43.099 --> 00:22:47.059 for their accredited investors to provide high 00:22:47.059 --> 00:22:51.160 yield, real estate backed debt. In essence, they 00:22:51.160 --> 00:22:53.799 became the lender. That is smart. When interest 00:22:53.799 --> 00:22:56.240 rates are high, it's a very good time to be the 00:22:56.240 --> 00:22:58.599 bank. It's a great time to be the bank. It allowed 00:22:58.599 --> 00:23:00.599 them to capture those higher interest rates for 00:23:00.599 --> 00:23:03.099 their investors, providing a really strong defensive 00:23:03.099 --> 00:23:06.460 play while the equity market was wobbling. It 00:23:06.460 --> 00:23:08.299 showed they could play both offense and defense. 00:23:08.640 --> 00:23:11.779 So up to this point, the entire story is about 00:23:11.779 --> 00:23:15.490 real estate. Buildings, houses, debt for buildings. 00:23:15.650 --> 00:23:19.029 But the subtitle of this deep dive includes venture 00:23:19.029 --> 00:23:22.029 capital. And this, to me, is the most surprising 00:23:22.029 --> 00:23:24.789 pivot of them all. Because dirt and bricks are 00:23:24.789 --> 00:23:28.089 one thing. Canjul. AI code and software algorithms 00:23:28.089 --> 00:23:30.990 are something else entirely. This is the Futures 00:23:30.990 --> 00:23:35.390 Now segment of our story. In late 2022, Fundrise 00:23:35.390 --> 00:23:38.990 launches the Innovation Fund. What was the pitch 00:23:38.990 --> 00:23:41.069 for this? Why should a real estate investor care 00:23:41.069 --> 00:23:43.470 about tech startups? The pitch was actually very 00:23:43.470 --> 00:23:46.190 similar to the original real estate pitch. The 00:23:46.190 --> 00:23:48.309 most exciting growth in the economy is happening 00:23:48.309 --> 00:23:51.109 in private markets and you are locked out. But 00:23:51.109 --> 00:23:52.849 instead of buildings, they were now talking about 00:23:52.849 --> 00:23:55.990 high growth private tech companies, specifically 00:23:55.990 --> 00:23:58.710 fintech and artificial intelligence. But why 00:23:58.710 --> 00:24:00.730 pivot? I mean, was real estate getting boring? 00:24:00.809 --> 00:24:03.799 Was the Sunbelt strategy not working? It's not 00:24:03.799 --> 00:24:05.839 about boredom. It's about where the value is 00:24:05.839 --> 00:24:08.240 being created in the 21st century. It's about 00:24:08.240 --> 00:24:10.220 something called the J -curve. The J -curve. 00:24:10.259 --> 00:24:12.200 Okay, break that down for us. So back in the 00:24:12.200 --> 00:24:14.900 90s, companies went public really early. Think 00:24:14.900 --> 00:24:17.240 about Amazon. It went public when it was tiny, 00:24:17.440 --> 00:24:20.039 relatively speaking. Right. So regular people, 00:24:20.240 --> 00:24:23.460 you and me, got to buy the stock and enjoy all 00:24:23.460 --> 00:24:25.240 of that massive growth in the public market. 00:24:25.299 --> 00:24:28.799 Today, it's the opposite. Companies stay private 00:24:28.799 --> 00:24:31.839 for a decade or even longer. All the massive 00:24:31.839 --> 00:24:33.680 growth, that hyper growth phase of a company 00:24:33.680 --> 00:24:36.359 like OpenAI happens before it ever goes public. 00:24:36.539 --> 00:24:38.940 Right. By the time it finally hits the Nasdaq, 00:24:39.180 --> 00:24:41.480 the 100x gains have already been made by the 00:24:41.480 --> 00:24:43.720 venture capitalists on Sand Hill Road. Exactly. 00:24:43.900 --> 00:24:45.980 If you wait for the IPO, you might be buying 00:24:45.980 --> 00:24:48.799 at the very top. Fundrise wanted to give Main 00:24:48.799 --> 00:24:52.160 Street access to that pre -IPO growth. They argued 00:24:52.160 --> 00:24:54.319 that a truly modern portfolio needs exposure 00:24:54.319 --> 00:24:57.789 to technology, not just real estate. So who are 00:24:57.789 --> 00:24:59.490 we talking about here in this fund? Are these 00:24:59.490 --> 00:25:03.230 random, no -name startups? Far from it. As of 00:25:03.230 --> 00:25:07.269 2025, the Innovation Fund has raised over $252 00:25:07.269 --> 00:25:11.130 million from around 74 ,000 investors. And their 00:25:11.130 --> 00:25:13.329 portfolio includes names that define the current 00:25:13.329 --> 00:25:15.609 tech landscape. They have a stake in OpenAI. 00:25:16.210 --> 00:25:18.470 ChatGPT Creators. They have a stake in Anthropic. 00:25:18.710 --> 00:25:21.670 The Claude Creators. The other big AI player. 00:25:21.970 --> 00:25:24.829 Ramp. Omni. These are what they call their star 00:25:24.829 --> 00:25:27.579 holdings. That is absolutely mind bending to 00:25:27.579 --> 00:25:30.619 me. So a regular person using an app on their 00:25:30.619 --> 00:25:32.640 phone that they may be downloaded to buy a piece 00:25:32.640 --> 00:25:36.119 of an apartment building essentially owns a tiny, 00:25:36.200 --> 00:25:40.799 tiny sliver of open AI. Technically, yes, through 00:25:40.799 --> 00:25:44.299 the fund. It democratizes access to the potential 00:25:44.299 --> 00:25:47.400 upside of the AI revolution in a way that simply 00:25:47.400 --> 00:25:49.900 wasn't possible a decade ago. It's the velvet 00:25:49.900 --> 00:25:52.000 rope being cut again, but this time for the VIP 00:25:52.000 --> 00:25:54.279 section of Silicon Valley. And they aren't just 00:25:54.279 --> 00:25:56.160 relying on their own app to sell this new fund 00:25:56.160 --> 00:25:58.259 anymore, right? I saw something about a major 00:25:58.259 --> 00:26:00.460 partnership with SoFi. Yes, that happened in 00:26:00.460 --> 00:26:04.119 July 2025. SoFi, which is another massive fintech 00:26:04.119 --> 00:26:06.660 company with millions of users, began offering 00:26:06.660 --> 00:26:09.599 Fundrise's innovation fund to its own user base. 00:26:09.799 --> 00:26:11.819 That's a huge distribution channel. That's putting 00:26:11.819 --> 00:26:14.859 it in front of so many new eyeballs. It is. It 00:26:14.859 --> 00:26:17.720 integrates Fundrise's product. into the broader 00:26:17.720 --> 00:26:21.299 FinTech ecosystem. It signals that Fundrise is 00:26:21.299 --> 00:26:23.900 becoming an infrastructure player. They're providing 00:26:23.900 --> 00:26:25.900 the investment vehicle that other platforms can 00:26:25.900 --> 00:26:28.359 just plug into. They are becoming part of the 00:26:28.359 --> 00:26:30.799 plumbing of private market investing for the 00:26:30.799 --> 00:26:34.390 masses. So we sit here in 2026. Fundrise has 00:26:34.390 --> 00:26:36.829 survived the startup phase. They have navigated 00:26:36.829 --> 00:26:39.130 a public scandal. They've weathered massive interest 00:26:39.130 --> 00:26:41.289 rate hikes. They're managing billions of dollars. 00:26:41.789 --> 00:26:44.930 And they're winning awards left and right. Forbes 00:26:44.930 --> 00:26:49.329 FinTech 50, Inc. 5 ,000, CNBC's top FinTech companies. 00:26:49.670 --> 00:26:51.970 They have, for all intents and purposes, built 00:26:51.970 --> 00:26:55.109 a new type of financial institution. Yeah. One 00:26:55.109 --> 00:26:56.849 that looks very, very different from the banks 00:26:56.849 --> 00:26:58.809 of the 20th century. So let's bring it all home. 00:26:58.890 --> 00:27:00.490 What does this all mean for the person listening 00:27:00.490 --> 00:27:02.650 to this right now? Why does this story matter 00:27:02.650 --> 00:27:05.339 to them? It matters because it represents a fundamental 00:27:05.339 --> 00:27:08.420 shift in how wealth is generated and who gets 00:27:08.420 --> 00:27:10.920 access to it. For a long, long time, the stock 00:27:10.920 --> 00:27:13.480 market, the public market, was the only game 00:27:13.480 --> 00:27:16.480 in town for the average person. Fundrise and 00:27:16.480 --> 00:27:19.000 the broader wave of these Reg A Plus platforms 00:27:19.000 --> 00:27:22.849 are trying to let Main Street. participate in 00:27:22.849 --> 00:27:25.650 the private markets, where so much of that early 00:27:25.650 --> 00:27:28.130 growth happens. It means investing is no longer 00:27:28.130 --> 00:27:31.009 a black box. You have tools to diversify your 00:27:31.009 --> 00:27:34.869 own portfolio beyond just stocks and bonds. But, 00:27:35.009 --> 00:27:36.990 and there's always a but, it requires a different 00:27:36.990 --> 00:27:38.970 level of understanding. This isn't a savings 00:27:38.970 --> 00:27:41.509 account at your local bank. No, it is not. And 00:27:41.509 --> 00:27:44.630 that's critical. These are illiquid assets. You 00:27:44.630 --> 00:27:46.349 can't necessarily pull your money out tomorrow 00:27:46.349 --> 00:27:48.809 like you can with a stock. Why not? Because real 00:27:48.809 --> 00:27:51.990 estate takes time to build or to sell. A venture 00:27:51.990 --> 00:27:54.369 capital investment can take 7 to 10 years to 00:27:54.369 --> 00:27:58.109 mature. The velvet rope has been cut, but the 00:27:58.109 --> 00:28:00.589 risks of being in the VIP section are still very 00:28:00.589 --> 00:28:03.069 real. You have to be willing to lock your money 00:28:03.069 --> 00:28:04.769 up for the long term. You have to have a long 00:28:04.769 --> 00:28:07.549 time horizon. That is the tradeoff. Access comes 00:28:07.549 --> 00:28:09.450 with responsibility. You get the seat at the 00:28:09.450 --> 00:28:11.670 table, but you also have to be prepared to pay 00:28:11.670 --> 00:28:14.390 the bill if the meal isn't good. And that raises 00:28:14.390 --> 00:28:17.170 the final and perhaps the most provocative question 00:28:17.170 --> 00:28:19.930 for our listeners to chew on as we wrap up. Let's 00:28:19.930 --> 00:28:22.599 hear it. Fundrise started by letting neighbors 00:28:22.599 --> 00:28:25.180 own their neighborhood shops. It was local. It 00:28:25.180 --> 00:28:27.640 was tangible. You could see the bricks. Now it 00:28:27.640 --> 00:28:29.759 lets them own pieces of artificial intelligence 00:28:29.759 --> 00:28:33.940 and massive, complex credit portfolios. As these 00:28:33.940 --> 00:28:36.880 platforms grow to manage not just $7 billion, 00:28:37.059 --> 00:28:40.680 but maybe $70 billion, maybe $700 billion, will 00:28:40.680 --> 00:28:44.279 the distinction between Wall Street and Main 00:28:44.279 --> 00:28:46.940 Street investors eventually disappear entirely? 00:28:47.599 --> 00:28:50.039 And if it does, does the sheer scale of this 00:28:50.039 --> 00:28:53.680 retail herd introduce new types of systemic risks 00:28:53.680 --> 00:28:55.920 we haven't even thought of yet? What happens 00:28:55.920 --> 00:28:59.500 if 350 ,000 people panic at the same time in 00:28:59.500 --> 00:29:01.900 a private market that isn't designed for that 00:29:01.900 --> 00:29:04.160 kind of speed or liquidity? That is a heavy thought. 00:29:04.220 --> 00:29:06.940 We wanted access. We got access. And now we have 00:29:06.940 --> 00:29:08.940 to live with the market dynamics we helped create. 00:29:09.200 --> 00:29:11.660 Indeed. It's a brave new world of investing. 00:29:11.759 --> 00:29:13.400 Well, thank you for unpacking this with us. It's 00:29:13.400 --> 00:29:15.740 been a fascinating look at how a change in the 00:29:15.740 --> 00:29:18.720 law and some ambitious brothers really did change 00:29:18.720 --> 00:29:21.140 the entire investing landscape. My pleasure. 00:29:21.220 --> 00:29:22.980 It was a great conversation. And to our listener, 00:29:23.099 --> 00:29:25.079 thanks for deep diving with us. We'll catch you 00:29:25.079 --> 00:29:25.599 on the next one.