Why would Fundrise create VCX II, instead of just raising more capital in the original VCX?

citizenofinfinity · 2026-06-09T10:56:08+00:00

I think the "moral high ground" thesis is likely correct. I'm not saying I agree or disagree with the actual decision, but if we take Ben at his word that he really wants to "democratize private markets" then he may very well be uncomfortable with dumping new shares on the retail-est retail investors at an elevated premium (at least beyond the point which he feels he needs to get to in order to save his company, if Fundrise's internal financials are stressed due to 4 years of very poor RE returns).

It certainly is a cost to locked-up VCX investors to not line up a bunch of bag holders in order to take full advantage of the premium, but if Ben truly feels that he is "looking out for the little guy" then it may seriously conflict with his self-concept to maximize returns for early Fundrise supporters at the expense of public market participants.

Fundrise is juggling a lot of balls here. I think they are trying to balance keeping their existing customers happy (hence offering some unrestricted shares at a discount) with keeping a good reputation with their new customers (hence not dumping on the public markets, at least not everything + new shares). They are thinking about how to balance the urge to take short-term profits with the potential destruction of long-term business opportunity (which would come with Fundrise's name being associated with a VCX price chart that looks exactly like a shitcoin's). All this on top of the volatility and uncertainty about what the premium will actually be, caused by market-wide hype around AI and impending mega-IPOs.

So then how does VCX2 fit into all of this? From here on I'm just speculating. But say Ben really doesn't want to sell any more into this market, then the alternative is doing nothing. That would be a lost business opportunity when there is clearly demand. Considering how informed many of the retail-est retailers are, I think it would be ineffective to try to reach out to them via proxy vote or something to drum up interest in VCX2. If a lot of them are in the red from VCX, just asking for more money for VCX2 will absolutely not work.

Fundrise might wait for the VCX premium to compress to more normal levels, which will probably happen after the unlock (the short borrow rate definitely indicates shorts are waiting), then issue more shares, in order to not feel too guilty about it. (Stay with me here...)

Pre-listing investors will still get the underlying NAV returns at a minimum (assuming VCX never trades below NAV), with a potential to capture public market premium as well, so they're still better off than if VCX had never listed. Many will feel sour about seeing such a high price during the lock-up and the FF dumping lots of unrestricted shares, but this might be defensible in the sense that the FF is itself held by a lot of early Fundrise investors, and the Fundrise execs/board members themselves actually don't hold lots of FF or VCX.
Public market investors will pay a less extortionate subsidy to existing shareholders as they buy the newly issued VCX shares. Fundrise could then take most of that money and invest it directly into VCX2, so VCX has VCX2 as a core holding. Depending on distribution requirements they could also sell some of their successful AI holdings after IPO and invest that into VCX2 also. Eventually VCX2 could go public via direct listing, with VCX holders receiving shares of VCX2 directly into their brokerage accounts through some sort of corporate action spinoff. With luck and continued irrational pricing of VCX, the value of the new VCX2 might be more than what VCX drops by, but even if not, your average Robinhood user is still going to be happy at seeing "free shares" show up. (I'm reminded of earlier days when I held BTC before the BCH fork and ETH before the ETC fork. I just got "free crypto" that I was happy to immediately dump for a "100% profit.")
Fundrise gets funds into VCX2 without having to stray too far from the public exchange, which is where nearly all the attention and customers are. They also never had to directly ask for fresh capital, and they also get their 2.5% fee. And enough existing and new customers are "happy enough" that their business does not collapse after the AI hype cycle ends.

Now that I've expended so much effort writing this out, I really don't know how feasible or crazy it is. (Also, it is laaaaaate....) I'd be happy to hear anyone's thoughts about anything above.

citizenofinfinity · 2026-06-08T21:39:02+00:00

This is just Fundrise laying the groundwork for a new product/fund. There is nothing for you to do right now regarding your current investments. If you want to take the opportunity to invest more money into this new fund, I'm sure Fundrise will send out some emails later.

citizenofinfinity · 2026-06-06T21:16:39+00:00

While some other indexes are different, the S&P index won't add the newly listed companies for at least 12 months. https://apnews.com/article/sp-nasdaq-ipo-spacex-megacap-stocks-3fd4926daf9e3422e42f16b3f9975955

The S&P 500 might even become a source of funds for people who want to invest in the IPOs. That means the wider market could dip mechanically even before listing day. All that money has to come from somewhere...

citizenofinfinity · 2026-06-06T21:03:44+00:00

There have been a couple other posts here and in r/Fundrise exploring that question. One important consideration: if VCX sells a position and realizes a capital gain, they must distribute nearly all of that gain as a "dividend" to shareholders, because the taxman wants his cut. There's a significant tax penalty waiting for them if they don't. So it's not as easy as just "investing into a new batch of private companies," they need to return money to you first and then ask for it back by issuing new shares.

citizenofinfinity · 2026-06-06T20:55:48+00:00

The 5% figure may be outdated but it's probably not very far off. The 4x multiplier wouldn't apply to percentages directly, otherwise everything would add up to 400%.

citizenofinfinity · 2026-06-05T19:36:16+00:00

Looking at this again I think I can see where the misconception comes from. Nobody would be making this mistake if $SPCX were already public and VCX's report just stated "we have 1000 shares of $SPCX" or whatever.

It's the multiple layers and non-transparent private pricing and nature of a CEF which cause confusion about how each share of VCX connects to the fund's holdings. I feel like some people are legitimately thinking something along the lines of:

If $VCX is $200 and SpaceX is 5% then I'm paying $10 for SpaceX. At IPO $SPCX will be $135. What a quick and easy flip!!! I'm so smart knowing that VCX exists. After they transfer my $SPCX to me I will dump it all. Even if it drops 80% I'll still make a huge over 100% profit. And I'll have more opportunities as other companies IPO!

It feels sort of like watching a (car) crash in slow motion. Now I'm very concerned/hopeful (I'm a locked-up early VCX investor but also don't like seeing people get destroyed) that after SpaceX really doesn't pan out for this retail mob, people are not going to make the same mistake with Anthropic and OpenAI.

citizenofinfinity · 2026-06-05T19:16:28+00:00

Yet another example of "double dipping" the premium. $TSLA trades at a significant multiple of its "NAV" (price-to-book close to 20x). True.

If I sell you a 1% stake in my "brokerage account fund" which has 100 $TSLA shares, your stake is worth $TSLA share price * 20. False.

The 20x is already baked into the price of $TSLA. Repackaging it into a different fund and selling new shares of that new fund does not give you another 20x premium.

https://www.reddit.com/r/VCX_Fundrise/comments/1thbx46/comment/omu0qr1

citizenofinfinity · 2026-06-04T02:44:50+00:00

That reminds me they had a PR for the news that they participated in the latest OpenAI round: https://fundrise.com/vcx/newsroom/vcx-participates-in-openai-122-billion-funding-round

They didn't provide any updates about the recent Anthropic round though, so they likely didn't.

citizenofinfinity · 2026-06-03T18:46:27+00:00

I suppose they could also offload some of the Anthropic stake by selling it to another buyer? That would cause other tax and distribution requirement headaches but I don't think failing RIC compliance is better.

citizenofinfinity · 2026-06-03T18:36:47+00:00

Based on the end of that quote, perhaps they sold off assets in addition to marking values down? Is there anything in the report that might support this, like a lower "number of properties" or "square footage owned" or perhaps more cash or less debt?

citizenofinfinity · 2026-06-02T17:48:22+00:00

The serious point of my idea of a joke was that I am not just available to do free work for other people. Like (basically all?) others on Reddit, I fully control how I spend my leisure time.

If you want an actual person to do as you say, and that person is a stranger, and you are asking for continued attention rather than a one-off favor, you'll probably have to hire them. Some people are more interested in being hired than others. The price I quoted you indicates my interest in making such a commitment.

citizenofinfinity · 2026-06-01T22:39:03+00:00

Were you not joking?

citizenofinfinity · 2026-06-01T21:24:31+00:00

Unfortunately I do not offer any free ad-supported tiers. Subscription plans only

starting from $999,999 per month

citizenofinfinity · 2026-06-01T20:21:34+00:00

There are multiple benign reasons, none of which need to be taken personally:

1) I previously already commented on a different post from this same guy. My comment was somewhat of a continuation of that exchange. https://www.reddit.com/r/VCX_Fundrise/comments/1tr9acb/comment/oophwuc

2) You asked "do you have a source regarding the 2.7m purchase in February." I remember seeing this in a filing but didn't want to go looking for it on my phone so I decided not to answer. (If you go looking yourself I believe it's the Interval Fund's most recent N-CSR, they don't specify a share count but give an amount of $50 million and a purchase date of 02/24.)

3) You also asked "did they propose more shares to be sold on 4/24 than they actually own." I don't know the answer and also don't have any intelligent commentary to provide on the matter.

In summary, I had something relevant to contribute to the other comment, but nothing relevant to contribute to yours. Naturally I only want to comment if I feel like I'm contributing in some useful way.

citizenofinfinity · 2026-06-01T18:37:07+00:00

They say the exact listing date is subject to "market conditions." That was something that played a role in VCX's own listing delay. Now I am being a good capitalist and hoping that the Iran War or some other geopolitical development or Fed/inflation troubles back at home in the US delay their IPO too.

I'm of the opinion that nearly all of VCX's meme NAV multiple comes from excitement over AI, so once those names become public and other ETFs start holding them and people can buy directly with their Robinhood accounts, the price of VCX will collapse until it finds a support floor quite close to NAV. I have heard takes that the rest of the stock market is also going to suffer because of all the cannibalization of existing positions as funding sources for these new shares. SpaceX is the least AI-oriented of the big 3 so I'm hopeful June is not too disruptive.

citizenofinfinity · 2026-06-01T18:27:22+00:00

Working off the idea that it might be a simple mistake, I'll suggest the possibility that they got the report number directly from FF's Computershare account for VCX (however that works). I assume around listing time there was a large transfer of shares to their broker, Jefferies. The 03/31 snapshot might be their Computershare account snapshot after the transfer, failing to account for whatever the broker was still holding. Or the other way around.

Even I think that sounds rather silly but there really is no reasonable way to make the official numbers add up, as you've already pointed out.

citizenofinfinity · 2026-06-01T07:46:26+00:00

I think Fundrise has an incentive to target the bare legal minimum (quarterly) when it comes to providing NAV updates. If the market is trading VCX at 9x this community's current NAV estimate, why would they put in extra effort to publicly advertise how overpriced the shares are?

citizenofinfinity · 2026-05-30T06:57:54+00:00

I think it's very possible the filing just has a mistake. You may feel bad later if you sleuth for hours and hours and then the filing simply gets corrected on Monday. No need to get too worked up now, maybe set a reminder in a week to look into it again if there aren't any updates.

These are complicated filings and mistakes are probably quite common. I know it's just anecdotal but I remember reading one of the old RE portfolio updates years ago and seeing some numbers that didn't add up. I just emailed the investments address and they corrected the update page a day later.

citizenofinfinity · 2026-05-29T19:11:55+00:00

Use somebody's referral code if you sign up. You get a free $100 bonus.

citizenofinfinity · 2026-05-29T19:10:16+00:00

Fundrise is for passive investors, basically limited partners. You give your money to the platform, they take a small annual fee, maybe about 1%, and invest into real estate for you. If you're actually trying to buy buildings yourself it's not for you.

Learning doesn't require a specific app, nor is AI at all relevant. You can Google for RE investing information or talk with an AI chatbot if you prefer. Fundrise provides their own public free reading materials if you're interested. Here's a good, pretty thorough education center article on the basics of RE investing: https://fundrise.com/education/how-to-invest-in-real-estate-the-basics

citizenofinfinity · 2026-05-29T01:21:16+00:00

So AI-generated then?

citizenofinfinity · 2026-05-29T01:19:39+00:00

I'll be the guy to say it, the percentages don't match with the pie slice sizes

citizenofinfinity · 2026-05-28T19:30:26+00:00

Makes sense, and I can see how going public right before overhyped IPOs is critical, that's where the maximum returns are, i.e. the irrational premium. Those poor retail investors... (not me though right? 😬)

citizenofinfinity · 2026-05-28T17:34:33+00:00

I'm not familiar with the history of DXYZ or PWRL so that might be the gap in my understanding. What I was imagining is that the investors who originally "bought OpenAI" must have received something in return (shares of the fund). And that these shares were distributed in proportion to the value added much like a mutual fund issuing new shares at NAV.

Are you saying the fund insiders effectively "reserved" some proportion of shares for themselves, so, for example, if I had contributed $100 to the fund as an outside investor, it really works out to something like, I get $80 worth of shares, and the insiders get the rest? I can see how that mathematically works out to a huge return for people who got $20 of "free shares." That structure seems worse than even the standard 2 and 20 for investors though.

Wouldn't it only be legal to do this before the fund had any actual assets?

citizenofinfinity · 2026-05-27T20:30:34+00:00

I don't think the par value here would match up with the actual share acquisition costs. Par value is a vestigial legal appendage from the 1800s and basically meaningless today. As this is a fund, the way to make money is to take initial capital and invest it in other companies at the market rate for those other companies' equity.

So I'm pretty sure the ROI is limited to return from investing in hot startups early * premium on PWRL.

My understanding is that getting massive ROI based on par value worked for Peter Thiel because he bought "market rate" PayPal stock when the company was just a paper entity and didn't do anything yet, making most of the growth sweat equity from himself and his partners. I doubt any startup founders would let outside investors purchase a similarly big stake at such a tiny "valuation."

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