With Benjamin Miller And Alison Staloch

Mar 2, 2022

Summary: In
episode 8 of season 8 of the Propcast, Louisa is joined by
Benjamin Miller, CEO and Co-Founder and Alison Staloch, CFO of Fundrise. They talk about their journey in PropTech and
how they built the Fundrise product to make high-quality real
estate investments available to everyone at a low cost. They also
discuss the benefits to the everyday user and how they’ve grown
since they launched in 2012. A key takeaway from this episode is
that most financial products are built for institutions, so how can
we democratise private market real estate for
individuals?

Resources:

Companies Mentioned:

Shout Outs:

Key Insights From This Episode: 

• Consumer
  products are built for people but most financial products are built
  for institutions. – Benjamin

• Most people
  invest in stocks but that is only half of the investment world. The
  other half is the private investments; venture capital, real
  estate, private credit and private equity. – Benjamin

• Good investment
  performance is usually a long undertaking and the outcome is a
  result of years of work and many people’s contributions. –
  Benjamin

• I dream about disrupting the old-fashioned
  institutions. If we could tear down the system and rebuild it from
  scratch, we would all be better off. – Benjamin 
• Two reasons which have accelerated our ability
  to find the right team members over the last year are; we’ve moved
  to being a remote-first company and we’re focused on expanding our
  source of talent in order to continue to increase the diversity of
  our team. – Alison 
• As the business scales; the CFO needs to be
  thinking about what resources we need, what capital we need so that
  we can continue to innovate, to pivot and to find breakthroughs. –
  Alison

Keywords: investment, real estate, portfolio, venture
capital

About Our Guests:

Benjamin Miller is Co-Founder and CEO of Fundrise, the largest direct-to-investor real estate
investment platform.

Fundrise’s mission is to use
technology to build a better financial system for the individual,
one that is simpler, more reliable, lower cost, and transparent.
Since launching America’s first online real estate investment in
2012, Fundrise has become the largest direct-to-investor real
estate investment platform with more than 1.2 million users, more
than $2.4 billion worth of equity under management, and $7 billion
worth of real estate transacted, including over 18,000 residential
units. Thanks to their robust proprietary technology and vertically
integrated  infrastructure, they’ve continued to democratize
private market real estate for everyone.

Prior to Fundrise, Ben has
decades of experience in real estate and finance. As Managing
Partner of WestMill Capital Partners and President of Western
Development Corporation, Ben was responsible for acquiring,
developing, and financing more than $500 million worth of
property.

Alison Staloch, CFO
at Fundrise. Alison joined Fundrise in April 2021, she
characterises her workload as typical of a late-stage company.
She’s focused on accounting and reporting, alongside more strategic
work, like improving revenue models and managing diversity, equity
and inclusion goals. Prior to joining our Fundrise, she served as
the Chief Accountant of the Division of Investment Management at
the U.S. Securities and Exchange Commission from December 2017 to
April 2021, and before that, served as Assistant Chief Accountant
from November 2015 to November 2017. From 2005 to 2015, she was
with KPMG LLP in the Asset Management practice. Alison has a
Bachelor of Arts in Psychology from Miami University and received a
Master of Accounting from the Ohio State University.

About Our Host

Louisa Dickins

https://www.linkedin.com/in/louisa-dickins-ab065392/

Louisa started her career in
property working at a well-known estate agency in London. Realising
her people skills, she moved over to Lloyd May to pursue a career
in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven
by PropTech and recruitment professionals, and Louisa oversees
their 5 core areas. Louisa co-founded LMRE and provides a
constructive recruitment platform to the new disruptors in real
estate. Louisa is also on the board of Directors at UK PropTech
Association (UKPA).

About LMRE

www.lmre.tech

LMRE believe there is a better
way to recruit. LMRE focus on a more comprehensive, client led focus
delivering exceptional talent to the place at the time. They are
passionate about the industry and passionate about people’s
careers. LMRE spend time with each client to become and an
extension of the business, and their transparency and core values
help them grow with the sector. LMRE simplify recruitment and
innovate with our clients and evolve the people driven, PropTech
community.

Timestamps:

[02:15] TO
BEN: Prior to Fundrise,
you were managing partner of WestMill Capital Partners and
President of Western Development Corp. Can you tell us about your
journey and how you ended up founding Fundrise? 

• I have been in real estate for 20 years but the
  first half of my career was very different to the second half. My
  first half was the ‘normal’ real estate, development and
  investment. 
• When the financial crisis of 2008 happened, it
  changed how I viewed the industry. I was not happy with the system
  and wanted to come up with a solution and Fundrise was
  born. 
• Most people invest in stocks but that is only
  half of the investment world. The other half is the private
  investments; venture capital, real estate, private credit and
  private equity. 
• It was strange to me that individuals were
  excluded from the private investment industry so we started a
  mission to go about trying to break down that
  barrier. 

[05:35] TO
ALISON: What’s the
transition been like going from the traditional capital markets
investments zone into a fast-growth tech company? 

• My entire professional life has been in
  investor protection roles as either a regulator or as an auditor.
  The investor-centric mission at Fundrise resonated with me as well
  as that mission focused on building what’s best for the
  individual. 
• A CFO role obviously encompasses much more than
  my previous roles.
• At Fundrise, our business encompasses much more
  than in a normal CFO role because we’re a real estate operator,
  we’re an asset manager and we’re a software technology
  company.

[08:45] When you say the ‘normal
investor’, can you describe that profile? 

• In any of the private world investments, the
  normal investor in that world is somebody with a billion-plus
  dollars and if not, you’re not served, you’re not a customer of
  those institutions.
• If you have tens of millions, maybe they made a
  little sleeve for you, but you’re not really their core
  customer.

[09:55] What is the profile of
someone who uses Fundrise? 

• A person uses our product. Institutions use
  places like Blackstone, Starwood or Sequoia. 
• We have investors who have tens of millions of
  dollars and we have investors who have tens of
  dollars. 

[11:50] Fundrise announced that
the average annual return for all Fundrise clients’ accounts was
22.99% for the year, can you tell us how you made that
happen? 

• Good investment performance is usually a long
  undertaking and the outcome is a result of years of work and many
  people’s contributions. 
• We pursue two strategies; a fixed income
  strategy and a high growth strategy in real
  estate. 
• Under those two strategies, we have two main
  parts; structural technology advantage and teams of people who are
  doing the work to drive great results.

[13:40] How have you gone about
growing the team and attracting people from all other industries to
Fundrise? 

• We have doubled our team since I joined in
  April 2021 and hiring is a daily effort for our entire
  team. 
• We’re looking for smart people with a strong
  work ethic, low ego and who really care about the individual
  investor.
• Two reasons which have accelerated our ability
  to find the right team members over the last year are; we’ve moved
  to being a remote first company and we’re focused on expanding our
  source of talent in order to continue to increase the diversity of
  our team. 

[16:40] What is next for the
whole sector as well as Fundrise? 

• One thing that I didn’t expect as we achieve
  scale is that we can do so much more than I imagine, so we now have
  new initiatives underway that are distinct from the original
  idea.
• The goal is to change how investment analysis
  and operations are done in real estate and finance.

[17:50] From the CFO point of
view, as the business scales, there are lots of extra bits of
structure you’re putting in as well to make sure the business can
continue to grow and make money.

• We need to continue to build out our resources,
  to support all of that growth including from a financial
  perspective and as portions of the business continue to
  mature.
• Thinking about what resources we need, what
  capital we need so that we can continue to innovate, to pivot and
  to find these breakthroughs. 

[19:15] The ‘LMRE’ part, Louisa
asks the guests to talk about:

• Lessons learned in your
  career

• Mention a person, product or
  service

• Rewarding parts of working in the
  space: 

• What are you most Excited about for the
  future of the space?:  

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