Democratizing the Private Markets — ft. Ben Miller
Aug 29, 2024
27:01
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Ben Miller, co-founder and CEO of Fundrise, dives into how his company is changing the landscape of private markets for everyday investors. He explains the unique regulatory environment and the necessity of building trust with investors, especially during challenging times. The discussion covers innovative strategies, like public venture funds, that are democratizing access to investments. Ben also shares insights on the emotional rollercoaster of entrepreneurship and how adapting to market changes is crucial for success in the financial world.
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Quick takeaways
Fundrise has pioneered a public venture fund, democratizing access to private equity for everyday investors previously excluded by regulations.
Trust between fund managers and investors is crucial, requiring transparency and consistent performance to navigate challenges in private market investments.
Deep dives
Democratizing Access to Private Markets
The podcast discusses the importance of democratizing access to private markets, which have historically been restricted to accredited investors. Ben Miller, the co-founder and CEO of Fundrise, highlights how conventional regulations treat investors based on their perceived sophistication, limiting opportunities for the general public. Fundrise has innovated by creating the first public venture fund, allowing regular investors to participate in private equity for the first time. This approach challenges the traditional notion of exclusivity in investment opportunities and aims to broaden access to wealth-building avenues.
Navigating Regulatory Challenges
Miller explains the complexity of the regulatory landscape surrounding private investments, where investor qualifications often dictate access to opportunities. He emphasizes that the regulatory framework in the U.S. is centered on either regulating the offering or the investor, which can create barriers for average investors. Through a collaborative process with the SEC, Fundrise developed a publicly registered 40-act fund that bypasses the need for investor accreditation. This regulatory navigation is essential for opening doors to private markets while ensuring compliance and investor protection.
Building Trust with Investors
The conversation underscores the vital role of trust in the relationship between fund managers and investors, especially in the private market space. Miller asserts that investors inherently want to trust but need consistent performance to maintain that trust over time. He shares experiences of having long-term investor relationships and the challenges faced during market downturns, which can test investor confidence. Establishing and nurturing trust requires transparency and a focus on delivering consistent outcomes, even amid the unpredictable nature of market cycles.
Ben Miller, co-founder and CEO of Fundrise, joins the show to share how his company managed to successfully break into the private markets. He discusses why the private markets are regulated differently, how his company is helping everyday investors get in on typically inaccessible opportunities, and how Fundrise earned the trust of companies like OpenAI to get on their cap tables.