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Robinhood CEO Vlad Tenev is touting the success of the fintech\u2019s new Ventures Fund I, which allows retail investors to invest in private tech companies like Stripe, Oura, Databricks, OpenAI, and others, through a publicly-traded fund listed on the NYSE. \u201cWe had something like over 150,000 retail investors participate in the IPO, so it\u2019s quite democratized,\u201d noted Tenev, in an interview at The Wall Street Journal\u2019s \u201cFuture of Everything\u201d conference this week.<\/p>\n
The fund, which launched in March, arrives at a time when the term \u201cunicorn,\u201d which once referred to the rare billion-dollar startup, has become outdated. When AI model providers like OpenAI and Anthropic are raising capital at valuations of $850+ billion to $900 billion, another word besides \u201cunicorn\u201d is needed.<\/p>\n
\u201cWe call them frontier companies,\u201d said Tenev, explaining how Robinhood differentiates these larger, private companies from other startups. <\/p>\n
\u201cThere are private companies that are raising capital at valuations in the high hundreds of billions. You\u2019re going to see, perhaps, multiple private companies getting into the trillions [in valuation] before the IPO \u2014 before retail investors can participate,\u201d he said.<\/p>\n
Robinhood\u2019s initial fund has exposure to many tech companies that have yet to go public, including most recently OpenAI, which joins Mercor, Ramp, Airwallex, Boom, and others. <\/p>\n
Tenev believes the new fund makes sense as part of Robinhood\u2019s broader mission to democratize access to markets for retail investors. <\/p>\n
Initially, the company did this through its zero-commission trades, which significantly increased retail participation in the public markets. Now it sees investing in large, private companies as the next step.<\/p>\n
\u201cYou can think of [the new fund] as a publicly traded venture capital firm with daily liquidity. No accreditation requirements and no carry,\u201d Tenev said in the interview. \u201cSo just a competitive management fee, no carry \u2014 which, for those of you familiar with venture capital, typically, when you invest in a fund as an LP, you pay a management fee, but there\u2019s also a carry of typically around 20%, which means 20% of your profits go to the fund manager.\u201d<\/p>\n
Tenev believes that, due to the size of these companies, retail investors should be able to get in earlier than the IPO \u2014 especially given how many companies are choosing to wait to go public. <\/p>\n
\u201cThe aspiration is, if you\u2019re a company raising a seed round and a Series A round \u2014 so, just first capital \u2014 retail should be a big chunk of that round, much like it now is in the public markets,\u201d Tenev said. \u201cAnd we should let those people in at the ground floor, so that they can actually benefit from this potential appreciation that\u2019s increasingly happening in the private markets,\u201d he added. <\/p>\n<\/div>\n