Author Topic: Fundrise IPO Cashout  (Read 356 times)

surpasspro

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Fundrise IPO Cashout
« on: March 13, 2024, 11:22:59 AM »
I've been using the Fundrise platform since 2017.  In 2018 I bought shares worth $1200 at the time and now approx worth $3,000.  There is no market yet for their shares and their website stats they would consider an IPO in 3-5 years.  From my date of purchase I'm already at 6 years and after reaching out to them, they need to hit certain milestones before a publice offering.  Saying it could be at least another 2 years or more.

I'm already cashing out of my other funds in my account and I'd just be left with the IPO shares.  I could potentially get my intial investment back right now and be done with it, or just wait it out in the hopes of it going public and scoring a larger payout.  I know these IPO shares are meant to be illiquid, but wondering what other people would do if they also have these shares?  Its not a lot of money in my overall portfolio, but it could also go to zero.  Any thoughts?  Thanks

Stimpy

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Re: Fundrise IPO Cashout
« Reply #1 on: March 14, 2024, 07:42:15 AM »
I suspect your stuck with them.   There is potential if you can find another fundrise investor who wants them.  Good luck on that

Me personally, I determined that their, shares would end up being worth less then the value paid, and their second "IPO" only reiterated that thought pattern to me.

MustacheAndaHalf

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Re: Fundrise IPO Cashout
« Reply #2 on: March 14, 2024, 09:25:15 AM »
How long has it been since the company was founded?

I assume the company existed for several years before you bought in, so that the age of the company is more than 6 years.  According to an interview with VC investor Marc Andreessen, VC is taking longer to IPO (12-15 years, I think).

When private investors buy shares, that "funding round" determines the price/share for the company stock.  You can search for "<company> funding round" to see what public information exists.

Over the past 6 years, your stock has grown +17%/year.  During that same time in public markets, micro-cap stocks have gained less than 5%/year, and small caps +8%/year.  I've heard of this difference called a "liquidity premium", where you earn a higher return for being willing to hold shares long term.

Before you decide to sell or not, read up on the "start-up J curve".  Early on, the stock valuation can go nowhere or even drop.  In the later years, the growth can be explosive.  If you wait for those later years, it might be painful to see the stock grow very quickly after you sell.  Keep in mind selling has a risk of FOMO.

surpasspro

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Re: Fundrise IPO Cashout
« Reply #3 on: March 15, 2024, 11:31:35 AM »
Fundrise was founded in 2010, but the opportunity to buy the ipo stock came in 2018.  There is that real fomo fear if I just wait it out I can make out more in the long run.  If I do get my intial investment back, then i have 6 years of zero returns.  I think for $1200 its worth rolling the dice and waiting it out. 

bacchi

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Re: Fundrise IPO Cashout
« Reply #4 on: March 15, 2024, 12:13:00 PM »
I'd wait it out, too, if the $1200 was a trivial part of my liquid assets. If it folds, you can probably take a tax deduction for the worthless security.

MustacheAndaHalf

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Re: Fundrise IPO Cashout
« Reply #5 on: March 16, 2024, 01:54:36 AM »
Oh, I thought you "bought shares" "using the Fundrise platform", but you bought shares of Fundrise itself.  The company was founded 14 years ago, so it is ripe to have an IPO.

Searching for "Fundrise funding rounds" shows seed funding in 2012, followed by three rounds of "series A" funding in 2014-2016.  You bought shares 8 years after the company was founded, and two years after a "series A" funding round.  Owing to a lack of experience on my part, I don't know if that is considered early ("series A") or late (8 years after founding).
https://tracxn.com/d/companies/fundrise/__e3AtOgYvcH_a2Ekoc4LYkmkTk-2Yta0NeM0hL01vfN4/funding-and-investors

The lack of funding rounds since 2021 means the price/share of Fundrise hasn't been set for a few years.  I don't know if your $3,000 in stock is based on 2021 valuations, or updated to reflect the difficulties in 2022-2023.
https://fundrise.com/education/q3-2023-letter

surpasspro

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Re: Fundrise IPO Cashout
« Reply #6 on: March 18, 2024, 08:39:01 AM »
In order to buy those ipo shares, you have to be an investor in the fundrise funds.  They limit you to a certain percentage of your portfolio witih them.  The $3k, right now is just based on their current nav, but I think that's arbitrary as they are setting the nav themselves as these funds aren't traded.  If they do go public and the current nav holds then potentially by $1200 investment can triple or go to zero lol.

 

Wow, a phone plan for fifteen bucks!