One of the reasons I’ve been a long-time supporter and affiliate partner of Fundrise is its willingness to innovate. Since its founding in 2012, shortly after the JOBS Act opened private investments to retail investors, Fundrise has consistently looked for ways to democratize access to institutional-quality investments.
From launching diversified private real estate funds like its Heartland and Income funds, to expanding into venture capital through the Innovation Fund, Fundrise has steadily pushed into areas that were once reserved for large institutions and ultra-high-net-worth individuals.
So when I received an email from Fundrise announcing its plans to list the Innovation Fund on the New York Stock Exchange, under the ticker VCX, I was intrigued.
I tend to be old-school when it comes to investing. If something isn’t broken, I’m generally reluctant to change it. I’ve been an investor in the Innovation Fund since 2023 and now have over $700,000 invested across three accounts. My plan is to hold for the next 5–10 years and ride the AI wave with a long-term mindset, largely with my children’s future in mind.
Here are my initial thoughts on the Innovation Fund potentially listing on the NYSE.
The Potential For Instant Liquidity In Venture Capital
I’ve invested in traditional venture capital funds for over 15 years. That experience has conditioned me to expect zero liquidity for a long time. When I allocate capital to venture, typically up to about 20% of my investable assets, I assume I won’t see that money again for at least 10 years.
The other 80% of my portfolio provides liquidity. Stocks, bonds, and even cryptocurrencies can be sold if cash is needed or if opportunities arise. Venture capital, by contrast, is meant to be patient capital.
Fundrise already offers quarterly liquidity for the Innovation Fund, which is relatively generous by venture standards. But providing that liquidity comes at a cost, one I didn’t fully appreciate at first until I spoke to Ben Miller, CEO of Fundrise.
To meet quarterly redemption requests, roughly up to 25% of the Innovation Fund has been allocated to liquid, lower-risk assets such as money market funds and corporate bonds. These assets provide stability and liquidity, but they also dilute returns during strong markets.
For example, in 2025, the Innovation Fund returned about 43.5%, driven largely by exceptional performance from core holdings like OpenAI, Anthropic, Anduril, and Databricks. Meanwhile, money market funds averaged roughly 4% and corporate bonds about 6%.
When 25% of a fund is earning a blended return closer to 5%, that acts as a meaningful drag during bull markets, much like holding excess cash in a rapidly rising portfolio. During strong markets, there was little redemption pressure anyway, as investors wanted to stay invested and often add more.
An NYSE Listing Offers Liquidity And A Potential Boost In Performance
This is where the potential NYSE listing becomes interesting.
If the Innovation Fund were publicly listed, the need to hold such a large percentage in low-return liquid assets could be significantly reduced. Liquidity would come from the market itself, not the fund’s balance sheet.
Based on simple back of the envelope math, if that 25% previously held in low-risk assets were instead invested alongside the rest of the portfolio, overall returns would have been close to 55%, instead of 43.5%. In other words, the 25% of the fund earning a low-risk 5% dragged down performance by ~11.5%. That is a significant cost to provide liquidity to shareholders who mostly didn't need liquidity during a bull market.
Of course, markets don’t move in straight lines. Corrections and bear markets are inevitable, especially in highly valued growth sectors like artificial intelligence. When prices fall, investors tend to follow the herd, buying near peaks and selling near troughs.
In a severe AI correction, a privately held fund offering quarterly liquidity could face redemption pressure it cannot immediately meet. That would likely require gating withdrawals, which creates frustration and operational complexity.
A publicly listed fund handles this dynamic differently. During periods of intense selling, the share price simply adjusts to reflect supply and demand. Investors must then decide whether selling at depressed prices makes sense, or whether staying invested aligns better with their long-term belief in the underlying companies.
Better Credentials for Potentially Better Investments
Fundrise has been around for over 14 years and now manages over $3.5 billion in assets. While commercial real estate has faced headwinds since the Federal Reserve raised rates aggressively starting in 2022, those challenges are largely cyclical and asset-class specific rather than reputational or operational. I'm hopeful CRE has turned the corner.
Listing the Innovation Fund on the NYSE would further enhance Fundrise’s credibility and brand. Getting listed is not trivial. It requires extensive vetting by lawyers, bankers, auditors, and regulators. All this requires time and money.
In some ways, it’s like getting into a top-ranked university. It signals a higher level of scrutiny, transparency, institutional acceptance, and overall standard. As a result, investors may feel more confident about the Innovation Fund, not more wary. With greater confidence comes greater capital, and thereby more investment opportunities.
Of course, public listings do not guarantee success. Poorly managed public funds still exist. But on balance, a NYSE listing sends a positive signal that Fundrise is serious, durable, and here for the long term.
For startups seeking capital, reputation matters. Founders evaluate investors not just on capital, but on track record, network, and ability to help businesses grow. In fact, one can argue that capital is a commodity because there's so much capital sloshing around.
Fundrise Provides More Than Just Capital
With over 380,000 investors, Fundrise has a distribution advantage that few traditional venture firms can match. Portfolio companies gain visibility, potential customers, and credibility simply by being associated with the platform.
I’ve discussed this before with Ben Miller, Fundrise’s founder and CEO, including how partnerships like the one with Ramp helped drive meaningful adoption through cross-promotion. Ramp (Innovation Fund holding) mentioned to Ben it was one of the most successful campaigns they had run. Now Ramp has zoomed ahead of BREX, its closest competitor that started two years earlier, and was recently sold to Capital One.
As an Innovation Fund investor, I obviously want the portfolio companies to succeed. I’m one example of an investor who can help amplify awareness, and there are many others who can as well across the platform.
Compare that with traditional venture firms like Sequoia. They have elite reputations and exceptional partners, but access is limited to institutions, insiders, and a small circle of founders. They also cannot instantly reach hundreds of thousands of engaged retail investors the way Fundrise can.
Fundrise is also a private company operator itself, using and testing products from its own portfolio. For startups evaluating potential investors, that combination of capital, platform, and operational insight is compelling.
Listing on the NYSE further legitimizes that proposition.
Here’s my podcast episode where I discuss the accelerating adoption of AI and the Ramp partnership with Ben Miller, CEO of Fundrise.
The X-Factor: Premium or Discount to Net Asset Value (NAV)
Before going further, it’s worth clarifying what net asset value, or NAV, actually means in this context.
NAV represents the per-share value of the fund’s underlying assets minus liabilities. In simple terms, it’s the estimated value of all the companies and assets the Innovation Fund owns, divided by the number of shares outstanding. When a fund is private, investors typically transact at or very close to NAV.
Once a fund is publicly listed, however, a second force comes into play: market supply and demand for the fund’s shares.
While NAV continues to be driven by the performance and valuation of the underlying portfolio companies, the trading price of the fund can move above or below NAV depending on investor sentiment, liquidity preferences, and scarcity. This difference shows up as a premium or discount to NAV.
Historically, many closed-end funds, especially those invested in illiquid assets like real estate that’s more difficult to sell, have traded at discounts to NAV, often in the 5% to 10% range.
The reasons are usually practical rather than dramatic, ranging from liquidity preferences and valuation uncertainty to skepticism about management or the inconvenience of owning a fund instead of the assets themselves. These closed end funds also don't hold highly coveted private AI company investments either.
That said, scarcity can flip the equation.
If demand for exposure to a particular set of private companies far exceeds the available float of shares, the fund’s market price can trade meaningfully above NAV. In those cases, price movements are driven less by changes in the underlying company valuations and more by supply / demand imbalances in the public market.
This dynamic already exists in pockets of the market. Some publicly traded vehicles with concentrated exposure to hard-to-access private companies have traded at sustained premiums, sometimes well above the value of their underlying holdings.
For the Innovation Fund, this creates an additional variable for investors. Returns would no longer be driven solely by how well the portfolio companies perform, but also by how the market prices access to those companies at a given moment in time.
In other words, the value of the underlying assets still determines NAV, but the market’s appetite for exposure determines whether investors can buy or sell shares at a discount or premium to that NAV. The harder to gain access to the portfolio companies, potentially, the higher the premium to NAV.
As a long-term investor, I assume the fund will trade roughly around NAV, possibly at a modest discount. But because the Innovation Fund owns scarce private assets and could have limited public float (perhaps only around 8%), there is also a plausible scenario where demand drives the share price to a premium, at least for periods of time.
That additional layer of supply and demand cuts both ways. It introduces volatility, but it also creates upside optionality that doesn’t exist in a purely private structure.
Example Of A Closed-end Fund Trading At A Premium To NAV: DXYZ
There is clear precedent for publicly traded funds trading at premiums to NAV. One notable example is DXYZ, or the Destiny Tech100 Inc. fund, which has traded at anywhere from a 100% to 500% premium to its net asset value. Back in November 2025, the fund’s NAV was roughly $7 per share, and it is likely higher today.
SpaceX accounts for approximately half of DXYZ’s holdings, which offers a strong indication of just how much demand there is for hard-to-access SpaceX exposure. Investors are effectively paying a substantial premium for convenience, scarcity, and perceived long-term optionality.
As a savvy investor, it’s reasonable to look at DXYZ and ask whether something similar could happen if the Innovation Fund were to become publicly traded. According to Fundrise's latest announcement, OpenAI, SpaceX, Anthropic, Databricks, Anduril, Ramp, and Stripe account for about 75% of the fund. These are the top private growth companies today.
One could argue that the Innovation Fund offers a more diversified mix of private growth companies with less concentration risk than DXYZ, which I prefer. If that’s the case, it’s not unreasonable to imagine a scenario where the Innovation Fund could trade at a meaningful premium as well, especially given how difficult it is for most investors to gain exposure to these companies directly.
A Discount To NAV Could Also Appear
That said, premiums to NAV are not guaranteed and can be volatile. Investor sentiment can shift quickly, particularly during market corrections or periods of rising interest rates.
Premiums can compress just as fast as they expand, even if the underlying companies continue to perform well. Once the 6-month lockup period expires, it is rational to expect any NAV premium to disappear and a discount to emerge. It will be up to Fundrise to properly manage the float as a closed-end listed fund.
In addition, a more diversified portfolio may reduce concentration risk but can also dilute the scarcity effect that drives extreme premiums. Unlike DXYZ, where SpaceX dominates the narrative, the Innovation Fund’s broader exposure could lead the market to value it more conservatively.
All of the private companies held in the Innovation Fund remain scarce and difficult to access, even for well-connected investors. Meanwhile, ServiceTitan, now publicly traded under the ticker TTAN, represents less than 2% of the fund, reinforcing that the portfolio remains focused on private growth opportunities rather than public market exposure.
Taken together, a premium is plausible, but it should be viewed as optional upside rather than a base-case assumption. For long-term investors, the primary driver of returns should still be the performance of the underlying companies, with any premium to NAV treated as a bonus rather than a guarantee.
Let's Make A Realistic Assumption Of NAV Potential For VCX
Let’s assume there’s a 50% chance the fund trades at a 10% discount to NAV, a 20% chance it trades at par, and a 30% chance it trades at a 50% premium (not 100% – 500% premium like DXYZ, which I wouldn't buy). Under those assumptions, the expected value of a $100,000 investment made before listing would be about $110,000.
Even with a higher probability of trading at a discount, that kind of asymmetric payoff is still the type of risk I’m comfortable taking as a long-term investor. You should play with the assumptions yourself to figure out multiple realistic scenarios.
Personally, I don’t plan to sell for at least another five years, and ideally ten. My goal is to invest until my kids graduate college in about 16 years to hedge against a potentially bleak labor market due to AI. Time and compounding are on my side. So the 6-month lockup post a successful VCX listing is not a concern.
Given the tax implications of selling, I would need a significant premium to NAV to be tempted. If I believe the fund can compound at 20% annually for five years, that’s roughly a 150% gain just by holding.
In that case, selling only makes sense at a large premium and with confidence I could redeploy the after-tax proceeds just as effectively. Otherwise, like many wealthy investors, I’d rather borrow against assets than sell them and pay taxes.
The Dream Trading Scenario
If the fund were to trade at an extreme premium, say 100% above NAV after the 6-month lockup, I might sell 20% of my position to lock in gains and let the remaining 80% ride. That would be a miraculous ~$700,000 appreciation on my ~$700,000 total position just through a listing. Taking some profits balances prudence with long-term conviction.
And if VCX trades at a discount to NAV, my base case scenario, I'll just hold like originally planned with the expectation the discount will narrow as visibility of VCX improves and Fundrise better manages the operations of the fund.
Building Transparency, Liquidity, and a Brand
Having built Financial Samurai since 2009, I understand how difficult it is to grow a business and a brand. Sometimes momentum builds quickly. Other times you get dragged through the mud and suffer. That volatility is simply part of building something meaningful.
Fundrise’s attempt to list the Innovation Fund on the NYSE represents a step toward greater transparency, liquidity, and brand durability. It may also improve access to higher-quality deals over time, which is the main goal for both Fundrise and its investors.
The fee structure remains highly attractive. Being able to invest in private growth companies of this quality without paying a 20% carry is rare. One closed-end venture fund I invest in charges 3% management fees and 35% of profits. By comparison, Fundrise’s new 2.5% fee with no carry is compelling.
The main challenge for investors, myself included, will be staying disciplined through public listing volatility. Greater liquidity makes it easier to sell during downturns and to justify poor timing decisions with convincing narratives. I can make both a bull and bear case for almost any position I hold, having trained myself to look at both sides in an effort to avoid being blindsided.
And there will be a correction in AI private companies at some point. The real test will be whether investors can hold through volatility or even buy the dip if they believe, as I do, that AI is at least a decade-long trend.
Investing In AI For The Long-Term
Overall, I’m excited to see what happens. I ended up voting yes to all three conditions proposed after deliberating for five days. Ultimately, I like the asymmetric risk/reward scenario of VCX potentially trading at a large premium to NAV compared to a potential 5% – 10% discount.
If the listing doesn’t materialize, I’m happy with the status quo. With a minimum investment amount of only $10, gaining exposure to the Innovation Fund is easy. And if Fundrise launches new funds investing in promising private growth companies, I’ll be eager to evaluate those opportunities as well. Either way, I will continue to be a long-term investor in the Innovation Fund.
Along with my yes vote, I invested an additional $3,000 + $2,000 on top of my $1,000 monthly auto-investment in my personal account with over $265,000. For over a year, I’ve been reinvesting a portion of my rental income into the fund. I was also pleasantly surprised to receive a $2,537.48 year-end dividend.
Readers, what do you think about the Innovation Fund potentially listing on the NYSE? Do you expect it to trade at a premium or a discount to NAV over time? And would you consider investing before a listing to potentially benefit from any NAV expansion driven by supply and demand?
Fundrise has been a long-time sponsor of Financial Samurai, and I’m also an investor in Fundrise products. I’ve spoken with and met Ben Miller, Fundrise’s co-founder and CEO, many times over the years, and our long-term investment philosophies are closely aligned.
As with all risk assets, there are no guarantees. Please invest only what you can afford to lose and ensure your overall asset allocation allows you to stay disciplined through market cycles.
I support anyone’s opinion on all this as everyone has their own motivations for investing. But, I think some people are misreading the benefits of the current setup vs the listing, which is understandable. An evergreen private fund is very different from a drawdown fund. Currently, the Innovation fund is evergreen and allows quarterly liquidity. Sure, it’s private, but the inflow and outflow of funds is massively disruptive to the management of funds and realized returns. For example, if there is a large outflow, for whatever reason, then Fundrise has to sell ILlIQUID assets at whatever price the can get to fund those withdrawals, unless they put up a gate. On the flip side, if there is a massive inflow of funds, it dilutes the existing holders returns. That is the major flaw of an evergreen fund having illiquid assets, but shorter term cash flows. Moving to a closed end fund would fix the AUM (capital base is locked in, unless new shares are issued or retired) and they would not have to sell assets based on capital flows but only when they want to for valuation purposes. Yes, there is daily market volatility, but, ironically, it is a FAR better alignment of long term capital base matched with long term underlying holding.
Yes, the key point is the mismatch between illiquid underlying assets and ongoing investor inflows and outflows in an evergreen structure. Not good when there’s suddenly a lot of panic too.
The key concern initially is how it trades to NAV. If there was some type of sweetener or minimum NAV discount guarantee or promise Fundrise would buy back any shares post listing at NAV for a short time after lock up, then the vote would overwhelmingly pass to list. Bc there’s also a chance for a premium to NAV as well.
Ben Miller stated in a reddit post 4 days ago that if the stock was trading at a large discount to NAV (he says 20% in the post) that fundrise “would very likely look to do a share buyback”. I dont know if a reddit post can be considered a promise but its at least something
Thanks for sharing! And that would be great if Fundrise did. If Fundrise could signal intention of doing a share buyback if the discount hits 10%, that would allay a lot of worries.
As investors, we are relying on Fundrise to do the right thing post listing, which I think they will.
Why fix it if it ain’t broke? I voted against going public because the fund is doing great and the stock market isn’t. Fundrise is not telling us something about going public, and it makes me uncomfortable. The Innovation Fund was appealing to me because it was private; otherwise, I could invest in publicly traded ETFs that hold private AI companies (i.e. AGIX, ARKVX, GPZ). I don’t understand the rush to the market except for the possibility the Fundrise C-suite is looking to exploit the situation by cashing in. The original prospectus makes no mention of going public or even possibly going public. I don’t like it when investment companies change their behavior on a dime. It’s unsettling, which is not a positive look with personal investments. Is Fundrise taking their best performing fund public because they are having debt problems with their real estate investments? Ever since they combined their plethora of real estate funds into the Flagship fund, it’s been a losing fund for multiple years now. Do they need capital to bail out their real estate investments? Are they running low on cash? According to their most recent SEC filing (CIK 0001640967), in December 2024 they had $21,081,000 in cash and nine months later, in September 2025, they had $10,896,000 in cash — that’s a 50% decrease in 9 months. In addition, the SEC filing states that Fundrise is operating at a loss with negative cash flow. — It looks like we have our answer.
What Samurai says about technicalities is only part of the picture. There are other points, some – market related, some – people related. CGPT easily finds multiple failure points – ask yourselves, it’s lengthy, but the bottom line to me is that now the link between my money and DaBigAi company is more direct, perhaps much more, than if it were to become Yet Another Index Fund.
Please chime in. Thank you!
Nope. I already voted against it. I chose to invest in Fundrise to AVOID the market — that was the appeal. It is disappointing that they want to take this fund public because it reflects poorly on their integrity.
Can you expand on why it reflects poorly on their integrity? Do you feel that other closed end funds and other funds that list have questionable integrity too? If so, why?
Can you confirm what the new fee structure would be? I read that the SEC filing included… Page 10 (and the surrounding sections) of the filing describes the shift from the current 1.85% flat fee to the proposed 2.0% management fee and the 20% incentive fee (carried interest) above an 8% hurdle.
Hard pass. I’ve been with fundrise since 2013. I invested in the innovation fund in order to have access to the private equity market. The benefit being long-term and less volatile. Not being able to access that money is a feature not a bug.
I have plenty of assets on the public market doing what public markets do.
This listing just makes Fundrise like any other greedy company who needs to cash out, so to the public markets they go.
Why do you use the word “greedy” when the fund charges no carry and Fundrise hasn’t made any money after marketing and operational expenses since launch in 2022? Companies deserve to make a profit if it is providing value. And the fund up 43.5% in 2025 is huge value.
Are you not being greedy for being an investor and unwilling to let the company that made you a large profit earn enough to keep on operating?
Related post: Investor Virtue Signaling In A Capitalist Society Is Interesting
No thanks.
One of the big reasons I invest some.of my net worth in to Private Equity / Venture is to avoid volatility.
The 6 months lockup will make our investment volatile and illiquid.
The timing of this IPO could not be worse, with AI narrative losing steam and the software stocks getting crushed.
Hard pass and I am worried that if the vote is a yes we won’t be able to redeem before IPO.
I am a little confused. Is the existing fund just being listed on the NYSE or are they issuing new shares and raising additional capital?
if it is just moving to NYSE and everyone has a 6 month lockup, there is no float.
It is confusing. Here’s my understanding.
Existing Innovation Fund shareholders will be given an opportunity to redeem (liquidate) at NAV before the fund lists, so they can exit before it becomes public. 
After the public listing, there’s expected to be a lock-up period (commonly six months for insiders/earlier holders) during which existing holders can’t immediately sell on the exchange. 
That lock-up is typical for newly listed funds/ventures to prevent a flood of shares into the market right away. But it does not mean there will be no float; rather, the float will gradually form as lock-ups expire and as the fund begins trading.
The NYSE mentioned it would like an 8% float. So the most likely thing to happen is that Fundrise could issue new shares at NAV for the float.
* Fund NAV: $500M
* NYSE wants a meaningful float, say 5–10%
* Fund issues new shares equal to ~5% of NAV
* Raises ~$20M in new capital
Those new shares:
* Are not locked up and are immediately tradable
* Form the initial public float
* Improve liquidity and price stability
The alternative is a secondary share offering by existing investors who want to sell.
If the fund issues shares at or near NAV:
* Existing investors’ percentage ownership drops slightly
* But total assets increase proportionally
* NAV per share is preserved
In fact, it can be positive:
* More capital to deploy
* Better liquidity
* Higher likelihood of trading at a premium instead of a discount, but of course, no promises
Leave it private.. that’s my vote. It’s a great basket of private companies with low fees and no one should be complaining about 20-43% compounding annual returns. I see the upside for Fundrise leadership with increased liquidity for shareholders and not being “handicapped” by the current quarterly cash position for redemptions.
Said simply, if it ain’t broke, why fix it? I believe in the holdings Fundrise already has and am not concerned with it being “disrupted” by a similar fund. The odds of VCX becoming the next “QQQ” ETF, etc are also slim once the larger, more reputable VC’s and PE firms start listing their own funds. Fundrise is trying to capture a “first-mover” advantage here (out if paranoia?) and it reminds me of Netflix splitting their DVD and streaming businesses in the early 2000’s, which ended up being far too soon.. just my $.02
Fair take. But being a first Mover advantage in a supply and demand constrained environment can be very powerful. The first Mover could literally attract a huge disproportionate amount of capital to reinvest.
apologies for duplicate post, but having technical difficulties. Data center credit is on page 5 of their 2026 semi-annual report:
Innovation Fund | Fundrise
I understand there are limited good opps in VC, and they have to do something with the sizeable inflow of funds, but I am concerned about data centers a few years down the road.
Anyway, totally in favor of listing, and agree with your points, Mr Samurai. I’ll take mark to market volatility in exchange for them working with a fixed amount of capital that they can manage efficiently, without quarterly redemptions, and minimize cash drag.
Ps, not a fan of SpaceX at $1.25 T. Hope they find a meteor made of gold in next twenty years.
Haha, me too. Some are even saying $1.5 trillion valuation. Sounds rich to me. I hope the listing of SpaceX doesn’t cause the next collapse of the market.
So, Sam explain this to me in simple terms please. I invested in Fundrise in 2021 as per you investing in it. I am a small investor $15K is what I hold. I have diligently been putting $250-$300 every month. Last year I changed strategy and part of my investment is in the innovation fund $6K. What does this mean for me a small investor who may lose all I put in? Explain.
Not sure I can give you proper advice without knowing more about your situation. Check out this page if you want to set up a consult. But no worries if not.
Walk me through a scenario of how you would lose all you put in? Thanks
I have $768k on Fundrise & voted “Yes”. What did you vote?
I ended up voting yes to all three. I’m OK with a 5% – 10% discount to NAV for the potential of VCX trading at a large premium to NAV post lockup.
But any more than a 10% discount will bum me out.
I was totally surprised by your posting. I didn’t get the Fundrise email until later in the afternoon. I have recently been moving money out of the public markets and into the Innovation Fund to escape the volatility in the public markets. So I am not a supporter of the move to a VCX listing on the NYSE. I was looking forward to the long term stable growth of the Innovation Fund and not a roller coaster ride over the next 5 to 10 years. Without much public information about the financial performance of the companies in the fund, I can only image that the market swings would be even more dramatic than those of public companies that report quarterly. I realize that this move is probably better for Fundrise as a company long term, so I am being selfish in wanting the Innovation Fund to remain private, but open to anyone who wants to invest. Please let me know if I am missing something.
Mr Samurai (or anyone),
Are y’all concerned about the Innovation Fund’s lending to datacenters (at pretty low rates, from what i can tell).
For what its worth, converting this to a close end fund where market provides liquidity rather than quarterly open-end private fund is a wise decision. You do not want Fundrise to conduct a fire sale if things get rough.
Can you share more insights? Where did you get that info and at what rate? You sure it’s from the Innovation Fund and not the Income Fund or another fund?
fundrise flagship fund owns datacenters (i need to confirm)
Sure, let me know.
he was correct about innovation fund + datacenters. see bottom line
So, Im a big fan of fundrise, and am solidly in favor of a listing (which will fix the capital base, which i think outweighs the mark to market volatility) rather than having quarterly liquidity for something that should really be long term.
One of the downsides of the current structure is that money is flowing in, chasing returns, and diluting current shareholders as well as creating cash drag, not to mention that good VC opportunities are few and far between.
Anyway, with the massive inflow of funds, it *looks* like Fundrise has deployed some cash into data center credit. Its in their semi-annual report, which i believe is from 9/2025.
see page 5 of the 2026 semi-annual
Innovation Fund | Fundrise
I understand why they are doing this, and, again, think it is a great company/fund, but I do NOT want to be lending to datacenters unless being amply compensated.
Am I wrong to think it would be better to stay “private?” Once it goes public, it can get caught up in the volatility of the overall market. Is that possible even if it stays private?
It seems like an VCX listing will break up the party. Untethered from NAV, ETFs can trade pretty wildly. The 6 month lockup is a big disadvantage for a chance at a little upside but all kinds of volatility. Existing fund owners are getting a small to medium chance at a premium (how much nobody knows and good luck getting the timing right!) in exchange for all kinds of volatility. I’m passing.
Mentally, investing in private assets is more calming. We don’t have to face the truth with daily mark to market evaluations like the public market. And that is worth something.
At the same time, ultimately, there is a clearing price whether you see it or not. So it is up to the individual Investor to look away or just stay calm among the volatility if the fund were to list. Because voluntarily can really shake out a lot of investors in the short term.
Don’t get me wrong, I see the appeal in the index for the index investor. That’s where I would put my money. But as a private investor in a newly public fund? I don’t know. What’s the point? What’s in it for me? I’ll have the same stuff everyone else has but dramatically less liquidity while volatility takes hold and I have to just watch it.
To me it seems like the end of a good ride that didn’t last very long. Maybe I’m looking at it all half empty. I have to say I was looking forward to building a nice sized position in the private fund for years. I’m pretty bummed by all of this. Feels like the worst of both worlds to be a private fund investor in Innovation Fund with an eventual VCX listing.
I’m glad you shared all this with us though Sam. I read the email before I came here. You did a balanced pros and cons. Thanks.
I feel your sentiment about investing in a private fund but then experiencing the volatility of a public entity. If the vote doesn’t pass, we’re back to status quo, which is great. We just don’t know whether we would ever trade at a premium to NAV, and potentially an huge premium. Maybe Fundrise may just start another venture fund and try again with a new structure.
For Fundrise, after marketing and operational expenses managing the fund, it’s hard to make money on just a 2% – 2.5% fee based on the AUM of now ~$500 million. Fundrise has proven themselves to be able to select and gain access to some of the top private companies. If they are not rewarded properly, then they may just stop with the offerings, which would be rational, but also a shame for investors. The key to building a successful venture capital businesses to keep introducing new funds and growing assets under management.
As a limited partner coming from the traditional venture capital world where they charge me 2 to 3% of assets on a management and 20% to 35% of profits, the Innovation Fund has been a real gift for me and other retail investors who decided to invest. Its five year track record in 2027 will most likely be top-tier, so I think they deserve to be compensated. But I can understand how if one has never invested in traditional venture capital funds and only equity ETFs or index funds, one would think the management fee is too much. But it’s apples and oranges.
One point though, how do you have dramatically less liquidity once the Innovation Fund is listed and the 6-month lockup is over? You would have 100% liquidity whenever the market is open.
“ I’ll have the same stuff everyone else has but dramatically less liquidity while volatility takes hold and I have to just watch it.”
I hear you on the fee, but again, the way it’s explained it sounds like that fee is going to be born by existing Private fund (PF) investors. That kind of feels like we’re being punished for being early adopters. I don’t know what the FCX purchasers will pay re: fees, but I do know under this structure PF folks are being asked to pay up for the public exposure costs.
I don’t assume that our PF shares are being converted to FCX. Am I wrong? If we stay with PF shares won’t we still be subject to quarterly redemptions? FCX owners can trade any day of the week. That’s what I am trying to communicate. If Fundrise successfully launches FCX I believe the public shares will be more desirable than the PF shares. It isn’t clear to me what the advantages are of owning PF shares post IPO?
VCX you mean?
Anybody who owns shares of the fund, old or new, would pay the same new fee.
Yes. VCX. I have no idea what FCX is. It was an “F is for Fundrise” moment. lol
Seems like a classic Catch-22: raise returns by increasing liquidity, while at the same time letting the open market determine the shareholder value in the way of price/volume. Gains in a bull market are likely increased due to greater AUM, but existing shareholder value as private equity would sacrifice the AUM for an open (re: democratic) premise of share redemption. If that makes sense, perhaps … Fundrise ‘should’ just start another venture fund and try again with a new structure.
I think starting another fund might be the best solution to everything. It takes away the uncertain risk of the NAV potentially trading at a discount. Also, Fundrise can offer investors in the innovation fund a first look at getting into the new fund.
The problem, of course, is getting new capital and finding new investments. It is gonna be hard to replicate the success of the innovation fund.
But I still think there’s a decent chance it could trade at a premium to NAV.
I appreciate the reply! My takeaway is that Fundrise has done a remarkable job, and that in offering ‘both’ investment opportunities in private equity, investors may then democratize their ownership and select the appropriate premium for themselves.
Great write-up Sam! I take it your Vote is Yes (as is mine). I do like your risk-reward analysis. I’m forecasting a bit of a Discount to NAV as more of psychological tactic, but you never know! All in all, I think it’s important to be part of these companies that will most likely change how society interacts & lives in the world.
I’m still thinking things through. I think a 5% discount to NAV is warranted and normal as the price to pay for liquidity at any time. The key is for that Discount to NAV to stay stable and not widen for some exogenous reason that has nothing to do with the fundamentals of the underlying assets.
I have never heard of DXYZ before. And personally, I would never pay even close to a 50% premium, let alone a 200% premium to NAV to gain access to SpaceX at current valuations. But if that is the market, then that is the market. I’m trying to figure out how much my bias for Fundrise makes me believe it deserves to trade at a premium to NAV as well, or due to the fact that Fundrise manages way more in assets, has been around longer, and has a great portfolio of private company holdings, which I would rather own than just half of a fund in SpaceX.
Agreed. I’ll probably continue building my position. I am curious on what their position is on buybacks. Especially if it trades at a discount for a longer period of time after the early phase (6-12months). All in all, just remember…worst-case scenario, we lose 100% of the money we put in!
I love this! I think listing the Innovation Fund is the first step for Fundrise to list itself on a stock exchange. I invested in the iPO fund, hoping for that day.
Maybe! At least they will understand what it takes to list if they ever try to take the company public. But recently, it’s been scary out there for public companies. So timing is also an issue.
What are your thoughts on the proposed six month holding period after the innovation ETF launches?
Fair, to find an orderly market. A 6-month lockup is pretty standard for all companies IPOing as well. Of course, anything can happen in that 6-month time period.
More reasons for investors to practice not counting any chickens before they hatch and to think long term, not be a short-term trader.
Lockups are not 6 months by default – that’s the long end of the spectrum. Count me skeptical of a AI rug pull.
Sounds good. What duration of lock ups do you see? Because back in my day, I helped take over 100 companies public and the lock up for insiders to sell was always six months.
Can you do explain how listing on the NYSE would be a “rug pull”?
One risk or opportunity I see is that I can invest in the innovation fund now before it lists on the New York Stock Exchange and then hopefully sell at a profit if the premium to NAV increases significantly. For those who are worried about tying up their capital, this clear indication of the desire to list on the New York Stock Exchange removes the liquidity getting trapped for at least a quarter. As a result, it seems logical to invest before the listing for the asymmetric risk and reward potential.
Also talks about OpenAI looking to raise over $100 billion in new funding at a higher valuation. Seems like the momentum continues.
Wow this is all so fascinating. Thanks for providing such a detailed and analytical explanation of the possible changes. It’s very helpful to read through a balanced breakdown of how this can affect investors as I certainly don’t have any expertise with funds going public. I’m very curious to see what happens and how this ends up playing out.
A bit off topic, but I am interested to know if you have invested in the Fundrise IPO. I purchased a few shares several years ago at $5 but to date, there does not seem to have been much of a push to list the company. I also wonder if moving the Innovation fund to the NYSE might affect the status of a prospective listing as well.
I have invested a bit in the innovation fund as well but not nearly as much as you have!
Check out this post: Just Say No To Angel Investing
I stopped investing in individual companies about 15 years ago, and focus on venture funds that hopefully pick winners and pay them their fee.
But I think from a business point of view, listing the innovation fund is a great move.
Hey Sam, thanks for this post. I’ve been invested in this fund since 2023 and have been impressed so far. It’s going to be a crazy decade ahead of us – just look at what anthropic’s release last week has done to software stocks. The stock market is a fickle beast so I cannot predict as to where the nav will be. But I am of the belief that the companies in this fund will continue to disrupt and innovate. I like your potential strategy to take 20% and let the rest ride. I am in this for the next 5 years at least. Can you imagine what can happen in that relatively short amount of time?
Anything can surely happen. The pace of growth and innovation is astounding. But as we all know, the faster, the car goes, the more serious the potential crash. So it’s vital we all think things through an asset allocate properly.
There are investors in cryptocurrency and SAAS companies getting blown up right now. And then the other week Gold and Silver blew up, hurting recent investors. So there are so many Land minds that we will step on and we must try to avoid as investors. This is also the reason why I vastly prefer investing in funds rather than individual names.
Good luck to us!
That is great advice about asset allocation. My investment in this fund currently represents 2.5% of my portfolio. But I know my biggest challenge will be to stay disciplined if/when it dips – not to sell, but to remind myself of this allocation as I will wish to add more.
I’ve always been curious about how regular investors can access venture capital. Your Fundrise analysis has been helpful as I consider investments, including for my children’s accounts. I’m wondering if a Roth IRA can invest in these options, or if I’d need a self-directed Roth IRA.
It would be fantastic if the Innovation Fund were listed on the NYSE. That would make it easy to purchase in any account.
I believe you can invest in Fundrise funds with a self-directed IRA. I was going to do so in the Innovation Fund last year, but I sold a rental house and had liquidity. So I just went with that.
Good point on listing on the NYSE to make it even easier to invest in the fund. I didn’t think about that from tax-advantaged fund perspective. Thank you.
But as always, make sure you asset allocate appropriate. If you go on Twitter, you’ll see retail investors blowing themselves up left and right due to poor investment discipline and improper allocations. It’s kind of shocking.
My daughter just started working, and my son will soon, giving them a much longer investment horizon than me. Their accounts can therefore take on more risk, which is why I’m keen to invest in the Innovation Fund for them.
That DXYZ example trading at a 600% premium to NAV at one point is nuts! I would rather have a more diversified portfolio of 3 to 6 growth names making up half the fund instead of just SpaceX getting valued at $1 trillion make up half the fund.
Fascinating insights. The risk of war trade-off does look compelling for the Innovation Fund to list on the NYSE. Thanks for sharing your thoughts.
You’re welcome. I couldn’t believe the massive premium to NAV as well when I started doing research on DXYZ.
I would feel foolish paying that big premium. It’s almost like a greater full theory because if SpaceX doesn’t increase by 600%, I’m assuming the fun investor is losing money because the value will essentially get marked to market. But I don’t have direct experience with such an outcome, so I’m not sure.