Fundrise

Fundrise was founded in 2010 by brothers Ben and Dan Miller and launched in 2012 before the passing of the JOBS Act, which enacted securities regulation to streamline the process of equity crowdfunding in the United States. Their father, Herb Miller of Western Development Corp., developed 20 million square feet of real estate based in Washington, D.C. Ben Miller worked as President of Western Development Corp. and Managing Partner of WestMill Capital Partners prior to Fundrise. Prior to Fundrise, Dan Miller worked for Western Development Corp. and also as Managing Partner of WestMill Capital Partners. The brothers founded the company with the idea to allow residents in the D.C. area to invest in real estate development projects they were building. Fundrise's first project, Maketto, in the H Street NE Corridor in Washington D.C. raised $325,000 from 175 investors, where any resident of D.C. or Virginia could invest for as little as $100, making it the first crowdfunded real estate project in the United States.

After the initial project, Fundrise was contacted by real estate companies looking to use the Fundrise platform to raise capital. Soon thereafter, the company expanded its platform to allow conventional real estate investments from commercial developers across the United States.

By May 2014 the company reported to have facilitated $15 million in investments involving 1,000+ investors. One of Fundrise's most publicized investments came in January 2015 when it began offering bonds for the construction of 3 World Trade Center, the location of the third tallest tower at the site of the World Trade Center in lower Manhattan.{{cite news|last1=Clarke|first1=Katherine|title=Investors can snag a stake in 3 World Trade Center for just $5,000 with new crowd funding initiative|url=http://www.nydailynews.com/life-style/real-estate/investors-snag-stake-3-world-trade-center-5k-article-1.2093690|accessdate=24 February 2015|newspaper=New York Daily News|date=27 January 2015}} The initial offering was for $2 million of the $5 million worth of bonds purchased by Fundrise for the financing of the $1 billion project. Bonds were offered for $5,000 each with a 5% tax-free gross annual return for five years.{{cite news|title=Crowdfunder Fundrise marketing 3 WTC bonds|url=http://therealdeal.com/blog/2015/01/27/fundrise-marketing-3-wtc-bonds/|accessdate=24 February 2015|publisher=The Real Deal|date=27 January 2015}}

Fundrise also raised more capital in its first-round of Series A investment than any other crowdfunding company, totaling $38 million. Funding was led by Chinese social networking company Renren who invested $31 million of the total $38 million.{{cite news|last1=Schwartz|first1=Eric Hal|title=Chinese Firm Leads $31 Million Investment in Fundrise|url=http://dcinno.streetwise.co/2014/05/28/chinese-firm-leads-31-million-fundrise/|accessdate=23 February 2015|publisher=Streetwise|date=28 May 2014}} Additional Series A investors include Guggenheim Partners, Justin Elghanayan of Rockrose Development Corporation, and James Ratner of Forest City Enterprises. By February 2015, Fundrise had commitments from six institutional investors for an additional $100 million in investment into the company's real estate offerings.{{cite news|last1=Alois|first1=JD|title=Six Institutional Funds Commit Over $100 Million to Fundrise|url=http://www.crowdfundinsider.com/2015/02/62323-six-institutional-funds-commit-over-100-million-to-fundrise/|accessdate=24 February 2015|publisher=Crowdfund Insider|date=6 February 2015}} In October 2015, co-founder and president Daniel Miller left the company to begin his new venture, Steward, an online lending platform for regenerative agriculture.{{cite news |last1=Putzier |first1=Konrad |title=Crowdfunding Firms Blow Up the Model to Survive in Real Estate |url=https://www.wsj.com/articles/crowdfunding-firms-blow-up-the-model-to-survive-in-real-estate-11578398401 |access-date=29 April 2024 |work=WSJ}}

In February 2016, Fundrise terminated its senior accountant for allegedly attempting to extort over $1 million from the enterprise over a claim that "the company acted inappropriately concerning two real estate deals." The accountant denied the allegations of extortion and claimed that the termination was retaliation for reporting "serious fraudulant behavior."{{Cite news|url=https://www.washingtonpost.com/news/digger/wp/2016/03/17/fundrise-cfo-says-he-was-ousted-after-alerting-crowdfunding-company-of-serious-fraudulent-behavior/|title=Fundrise CFO says he was ousted after alerting crowdfunding company of 'serious fraudulent behavior'|last=O'Connell|first=Jonathan|date=7 Mar 2016|newspaper=Washington Post|access-date=2016-08-03}} The company denied the claims and hired an outside audit firm to conduct an investigation into the allegations, which ultimately concluded there was no reasonable basis to the allegations.{{Cite web|title = Fundrise chief financial officer terminated|url = http://www.bizjournals.com/washington/breaking_ground/2016/02/fundrise-executive-terminated-over-alleged.html|website = Washington Business Journal|access-date = 2016-02-19|last = Sernovitz|first = Daniel|publisher = American City Business Journals}}{{Cite web|url = https://www.sec.gov/Archives/edgar/data/1648956/000114420416080169/v431175_1u.htm|title = United States Securities and Exchange Commission Pursuant Regulation A of the Securities Act of 1933|date = February 9, 2016|access-date = 23 February 2016|website = SEC.gov|publisher = Securities and Exchange Commission|last = |first = }}{{Cite web|url=https://s3.amazonaws.com/fundrise-content/website-documents/02857c3c-b377-42b7-aebb-e7fcb2176b9d/REIT%202%20-%20OC%20(Supplements%201-14).compressed.pdf|title=Fundrise Equity REIT Offering Circular}}

On December 3, 2015, Fundrise launched the Fundrise Real Estate Investment Trust, the world's first online real estate investment trust or "eREIT" with an initial offering of $50 million pursuant to Regulation A+.{{Cite news|url=https://www.forbes.com/sites/trangho/2015/12/03/how-to-play-billion-dollar-real-estate-deals-with-just-1000/#3b12e6ee2173|archive-url=https://web.archive.org/web/20151205221954/http://www.forbes.com/sites/trangho/2015/12/03/how-to-play-billion-dollar-real-estate-deals-with-just-1000/#3b12e6ee2173|url-status=dead|archive-date=December 5, 2015|title=How To Play Billion-Dollar Real Estate Deals With Just $1,000|last=Ho|first=Ky Trang|work=Forbes|access-date=2017-06-09}}

The Fundrise eREIT offering provides prospective investors with the opportunity to invest in an intended portfolio of properties across the United States for a minimum of $1,000. The aim of the eREIT is to use new technology to give both accredited and unaccredited investors the option to invest in U.S. real estate. This financial offering was made possible by the expansion of Regulation A under the JOBS Act.{{Cite magazine|url=https://www.wired.com/2015/12/fundrise-wants-to-let-anyone-own-a-piece-of-a-skyscraper/|title=Fundrise Lets Common Folk Invest In Posh Real Estate Ventures|magazine=Wired}}

The company subsequently opened a second eREIT, the Fundrise Equity REIT, in February 2016.{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1645583/000114420416096460/v437990_1-k.htm#a_003|title=FUNDRISE REAL ESTATE INVESTMENT TRUST, LLC - FORM 1-K|date=April 26, 2016|publisher=UNITED STATES SECURITIES AND EXCHANGE COMMISSION}}

In December 2016, the Fundrise Income eREIT was the first company to raise $50 million, the maximum amount allowed under Regulation A. Later in December 2016, the Fundrise Growth eREIT became the second ever issuer to raise $50 million pursuant to Regulation A.{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1640967/000114420417005981/v458388_partiiandiii.htm|title=Rise Companies Offering Circular}}

In June 2017, Fundrise announced the eFund, a diversified portfolio of for-sale housing in major U.S. cities.{{Cite web|url=https://www.forbes.com/sites/samanthasharf/2017/06/15/home-sweet-investment-fundrise-introduces-new-way-for-millennials-to-endow-their-future-houses/#4df0ee1e779b|title=Home Sweet Investment: Fundrise Introduces New Way For Millennials To Endow Their Future Houses|website=www.forbes.com|access-date=2017-11-30}} The first eFund was the Los Angeles eFund, with an initial offering of $50 million under Regulation A+.{{Cite news|url=https://www.crowdfundinsider.com/2017/07/119658-fundrise-officially-announces-new-efunds/|title=Fundrise Officially Announces New eFunds {{!}} Crowdfund Insider|date=2017-07-20|work=Crowdfund Insider|access-date=2017-11-30|language=en-US}} In conjunction with the eFund launch, Fundrise introduced a goal-based investing and an advisory service.{{Cite news|url=https://www.crowdfundinsider.com/2017/06/101973-fundrise-2-0-online-real-estate-investment-platform-revamps-service-first-ever-robo-advisor-real-estate/|title=Fundrise 2.0: Online Real Estate Investment Platform Revamps Service with First Ever Robo-Advisor for Real Estate {{!}} Crowdfund Insider|date=2017-06-13|work=Crowdfund Insider|access-date=2017-11-30|language=en-US}}

In 2018, Fundrise announced that it had acquired thirty residential properties in the Washington, D.C. area in anticipation of Amazon's HQ2 announcement. Fundrise is establishing the HQ2 DC eFund, to invest as much as $50M in residential properties throughout Washington, D.C.{{Cite web|url=https://www.bisnow.com/washington-dc/news/multifamily/fundrise-launches-amazon-hq2-fund-after-speculatively-buying-30-dc-area-properties-95097|title=Fundrise Launches Amazon HQ2 Fund After Speculatively Buying 30 D.C.-Area Properties|website=www.bisnow.com|access-date=2019-03-04}}

In 2021, Fundrise received $300 million in credit from Goldman Sachs to invest in developing single family homes in the Sun Belt.{{Cite web|url=https://therealdeal.com/2021/06/04/fundrise-scores-goldman-backing-to-expand-single-family-rental-market/|title=Fundrise scores Goldman backing to expand single-family rental market|website=TheRealDeal|date=4 June 2021}}{{Cite news|url=https://www.wsj.com/articles/goldman-sachs-backs-single-family-rental-fund-for-small-investors-11622548802|title=Goldman Sachs Backs Single-Family Rental Fund for Small Investors|work=Wall Street Journal}}

Fundrise was selected for the Forbes Fintech 50 list in 2015, 2016, 2017, and 2019.{{cite web|url=https://www.forbes.com/fintech/2015/#45e298dfe96b|title=Fintech 50: The Future Of Your Money|website=Forbes|accessdate=7 February 2018}}{{cite web|url=https://www.forbes.com/sites/janetnovack/2016/11/07/the-forbes-fintech-50-for-2016/#347e0e111b10|title=The Forbes Fintech 50 For 2016|first1=Janet| last1=Novack | first2=Matt|last2=Schifrin|work=Forbes|accessdate=7 February 2018}}{{cite news|url=https://www.forbes.com/sites/samanthasharf/2018/02/13/forbes-fintech-50-2018-the-future-of-real-estate-investment-and-finance/#1509a45167ed|title=The Forbes Fintech 50 For 2018|first=Samantha|last= Sharf|work=Forbes|accessdate=20 February 2018}}{{Cite web|url=https://www.forbes.com/fintech/2019/|archive-url=https://web.archive.org/web/20190205155240/https://www.forbes.com/fintech/2019/|url-status=dead|archive-date=February 5, 2019|title=The Forbes Fintech 50 For 2019|website=Forbes|language=en|access-date=2019-02-04}} In 2018, Fundrise placed position 35 overall and position 1 in the financial services industry on the Inc. 5,000 list.{{Cite web|url=https://www.inc.com/inc5000/list/2018|title=Inc. 5000 2018: The Complete Rankings|website=Inc.com|access-date=2018-10-17}}

• Alternative investment
• Disruptive innovation
• Financial Technology
• Registered Investment Adviser
• Regulation A

{{reflist|2}}

• {{cite news |last=Bhattarai |first=Abha |date=19 August 2012 |title=Fundrise relies on small investments for new property on H Street NE |url=https://www.washingtonpost.com/business/capitalbusiness/fundrise-relies-on-small-investments-for-new-property-on-h-street-ne/2012/08/19/6845a7ec-e653-11e1-936a-b801f1abab19_story.html |newspaper=The Washington Post}}

• [https://fundrise.com/ Fundrise official website]

Category:Privately held companies based in Washington, D.C.

Category:Crowdfunding

Category:Real estate companies established in 2010

Category:Real estate services companies of the United States

Category:Investment companies of the United States

Category:American companies established in 2010

Category:2010 establishments in Washington, D.C.