Set the Instant Pot to "SEAR". Once the display reads "HOT" and add olive oil and melt the butter in the pot.
Add shallot and garlic and cook until fragrant, stirring frequently.
Add mushrooms and cook until softened, about 5 minutes, stirring occasionally. (Alternatively, if you sauteed mushrooms in advance, skip this step and add the mushrooms in step 5.) Stir in rice and toast it lightly, about 3 minutes.
Add wine and cook it until wine is almost evaporated, a minute or so.
Add 3.5 cups of broth and give it a good stir, scraping up the bottom. Make sure nothing is stuck to the bottom of the pot.
Close the lid and set the IP to Manual (or Pressure Cook on some models) for 6 minutes. Make sure the valve is set to "sealing". (NOTE: It took about 10 minutes for my IP to come to pressure.)
As soon as timer is up, do a quick release pressure by carefully turning the valve to "venting". And carefully open the lid.
Stir in parmesan cheese and parsley. Season with salt and pepper to taste, if needed.
Add the reserved broth to achieve the desired consistency. You most likely don't need to add any additional liquid, as it comes out pretty creamy. But you'll need it if you need to reheat the leftovers.