Just two months after taking its first venture fund public, Robinhood is preparing to launch a second. the company has filed a confidential registration for RVII, a standard regulatory step that allows it to work through the approval process before making details public.
Youunlike his first fund, which currently has stakes in 10 companies in advanced stage — Airwallex, Boom, Databricks, ElevenLabs, Mercor, OpenAI, Oura, Ramp, Revolut and Stripe — RVII will cast a wider net, investing in early-stage and growth-stage startups. It’s a significant distinction, given that early-stage startups are younger and carry more risk, but they also offer the potential for higher returns.
The fundraising goal for RVII has not yet been set, the company said in a blog post. For its inaugural fund, Robinhood attempted to raise $1 billion but ultimately failed. several hundred million less of that objective.
Despite the shortfall, the first fund has performed well. RVI, the symbol of Robinhood’s first NYSE-listed fund, debuted on the NYSE at $21 per share in early March and has since more than doubled, closing Monday at $43.69. Market enthusiasm for the AI prospects of the fund’s underlying startups has likely fueled the stock’s rise.
The premise behind both funds addresses a long-standing gap in who can invest in startups. Under federal rules, only “accredited” investors (those with a net worth greater than $1 million or annual income greater than $200,000) can invest money in private companies. Historically, that has locked ordinary investors out of the earliest and most lucrative stages of a company’s growth. RVI and now RVII are designed to change that, allowing anyone to invest in a portfolio of private startups through a regular brokerage account.
“You can think of (Robinhood Ventures) as a publicly traded venture capital firm with daily liquidity. No credentialing or transfer requirements,” Robinhood CEO Vlad Tenev said in a interview at the Wall Street Journal’s Future of Everything conference last week. Daily liquidity means shares can be bought or sold any day the market is open, unlike traditional venture capital funds, where capital is locked up for years. No carry means that Robinhood doesn’t take a percentage of the investment profits, as conventional venture firms typically do.
In recent years, the most valuable AI startups have grown from early bets to companies worth tens or hundreds of billions of dollars, and almost all of that appreciation has occurred in private markets, out of the reach of most investors.
Tenev’s long-term vision goes even further. “The aspiration is that if you are a company that is raising a seed round and a Series A round, meaning just the first capital, retail should be a big part of that round, just like it is now in the public markets,” Tenev. said at the conference. “And we should let those people in on the ground floor, so they can really benefit from this potential appreciation that’s increasingly happening in private markets.”
If that view takes hold, it could fundamentally change the way startups raise their seed capital, with retail investors eventually sitting alongside venture firms even in the early rounds, where the biggest returns are often made and a lot of money is also lost.
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