Robinhood files for 2nd public venture fund

Robinhood, a US trading platform, has confidentially filed to launch RVII, its second publicly traded venture fund, about two months after listing RVI.

The US trading platform is expanding its investment strategy from late-stage deals into growth and early-stage startups.

The company said RVII’s fundraising target has not been set, while RVI sought US$1 billion and raised several hundred million dollars less.

RVI holds stakes in 10 private companies including OpenAI, Stripe, Databricks, and Revolut.

RVI debuted on the New York Stock Exchange at US$21 a share in early March and closed at US$43.69 on May 11.

Robinhood said both funds let retail investors buy listed shares tied to private startup portfolios through regular brokerage accounts.

🔗 Source: TechCrunch

🧠 Food for thought

Implications, context, and why it matters.

How Robinhood’s venture fund works for retail investors

The fund is a listed closed-end fund. That setup lets it own private-company stakes that are hard to sell while its shares trade each day on an exchange 1.
Investors pay a 2% yearly management fee on net assets, cut to 1% for the first six months after the IPO. There is no performance fee, and the manager does not take carried interest, or a share of profits 2 1.
Shareholders cannot redeem shares with the fund at net asset value. They must sell in the open market, where active trading may never take hold 1.

A venture capital model that could widen startup gains

A second fund launched soon after the first gives Robinhood a steadier stream of management fees and less reliance on transaction revenue 3. That also creates a conflict of interest because Robinhood and related companies usually make more from affiliated funds such as RVI than from unaffiliated funds 4.
The structure matches an approach backed by the Securities and Exchange Commission (SEC)’s Investor Advisory Committee for retail access to private-market assets through registered funds. It also gets around accredited investor rules that have kept most people out of direct private-market deals 5.
The model gives startups another source of capital. It gives fund shareholders liquidity through public trading without forcing portfolio companies into an IPO. That may give high-growth companies another reason to stay private longer 2.