Unlocking Private Markets for Everyday Investors with Fundrise CFO Alison Staloch

The Modern CFO

Private assets have traditionally been accessible only to large institutional investors and venture capitalists

But that’s quickly changing, thanks to investment platforms like Fundrise.

Fundrise is an online real estate investment platform with over 300,000 active users. Through Fundrise, everyday investors can access real estate markets and deals that they normally would not have been able to invest in on their own.

In today’s episode of The Modern CFO, host Andrew Seski speaks with Fundrise CFO Alison Staloch about the democratization of private markets, alternative asset management, investor communications and transparency, and more.

Show Links

• Check out Fundrise
• Listen to Onward, a Fundrise Production
• Subscribe to The Distance Newsletter, a Fundrise Publication
• Connect with Alison Staloch on LinkedIn
• Check out Nth Round
• Connect with Andrew Seski on LinkedIn

Transcript

Please note that the transcript is AI-generated and may contain errors. The content in the podcast is not intended as investment advice, and is meant for informational and entertainment purposes only.

[00:00:00] Andrew Seski: Hello everyone and welcome back to another episode of The Modern CFO Podcast. I'm your host, Andrew Seski. Today's episode highlights one of my favorite topics again: thoughtful democratization and access to alternative investments. I know you've heard me discuss secondaries and venture funds with Aman and Andrea, regulating accreditation and the history of Reg CF with Woodie, even angel investing with Oslene. But today, I'm thrilled to take another approach at this topic, which is so important and so critical at this time, with Alison Staloch, the CFO of Fundrise. Alison, thank you so much for being here.

[00:00:43] Alison Staloch: Thanks for having me, Andrew. Super excited for the conversation.

[00:00:45] Andrew Seski: So could you give us a quick overview of Fundrise? I know it's actually the largest direct-to-investor real estate platform in the US today. Is that right?

[00:00:54] Alison Staloch: Yeah, that's right. So Fundrise is a FinTech company with a mission, a really broad mission, of building a better financial system for individuals. But today, that means alternative asset management, primarily focused in real estate, really with the idea of giving everyday people access to the private markets that they were historically excluded from whether due to lack of scale, lack of wealth. And in that mission, we've built a capital-raising machine founded in regulatory excellence that allows us to scale thousands of individuals' investments to then utilize capital deployment technology to compete for alternative assets with the Blackstones and Starwoods. And with the launch of our venture capital fund and now with the Sequoias of the world, we have about three and a quarter billion in equity AUM offered exclusively through diversified portfolios. And our goal right now is to disrupt the private markets by using technology and new approaches on old industries to give outsized returns back to investors.

[00:01:52] Andrew Seski: So I really like this approach and we're gonna go into the nuances of risk/reward investment profile for the differences between institutional investing and retail. But I'd like to go back in time first because you are a relatively recent CFO and in this industry. So I know you cut your teeth in the world of finance at KPMG, so Big Four experience. I want to take a minute to discuss your early career. And I think that sometimes people think that Big Four audit or accounting background is a qualification for a direct route to a CFO position, but you also worked at the SEC. So I want to kind of balance some of these, the regulatory knowledge that you have and some of the experiences that you had that are gonna make you and continue to allow you to be a really successful impact engine at Fundrise.

[00:02:41] Alison Staloch: Yeah, so I joined Fundrise as CFO last year, so 18 months in the making. I've been a CFO for a whole 18 months. Like you said, prior to that, I was in audit, I was at the SEC. I was in a policy-oriented regulatory role as the chief accountant for the Division of Investment Management, which is the division that regulates registered investment companies and registered investment advisors and sets policy for them. And I think that that background has been particularly important for Fundrise. We have kind of a business built on regulatory discipline and that's been a huge differentiator for us, really has set us apart. I always joke like, oh, we literally chose to play in like, all of the securities laws, not just like one of them. And whether that's Regulation A+ or the 40 Acts, I think the structure that we've built requires a ton of regulatory compliance and discipline for a company of our size and for really kind of a startup to deal with. And we've focused on that regulatory excellence within the organization since the beginning, innovating within the regulatory requirements. I think within Regulation A+ we're, I think we're the biggest user and the most successful operator in that regulation.

[00:03:53] And so, that comfort with the compliance and the regulatory discipline was one reason that I felt comfortable moving to Fundrise from the SEC. But obviously, my background is heavily, heavily accounting. And when you think about finance, it's obviously much broader than that. I think it makes sense for Fundrise and where we are. But certainly as we look to the future, we'll want to focus on hiring finance team members with different backgrounds that complement my background.

[00:04:23] Andrew Seski: Yeah, it almost seems like we're teasing out your definition of a modern CFO, so we could really, we could start there as well. I think that we get an overwhelming amount of guests who just argue that CFOs, the new breadth of responsibilities has really changed, especially today, whether it's, like you just mentioned, hiring, human resources, being a leader that attracts other team members from more diverse backgrounds and keeping them engaged. The retention I think is a huge issue right now in the churn of employment. So, really curious as to what you think. Even though it's been 18 months, these have been a pretty volatile and unique 18 months to take on this leadership position. So, really curious to hear it from your perspective.

[00:05:05] Alison Staloch: Yeah, so I think there's two things I'd mention. Maybe one more kind of like a mantra or approach to being a CFO today. And second, what I think is really important for a mission-oriented business like Fundrise to consider when hiring a CFO. So the first one, I think it's that you have to be constantly evolving. The CFO role is constantly changing, but what I mea...