Robinhood CEO Vlad Tenev is touting the success of the fintech’s new Ventures Fund I, which allows retail investors to invest in private technology companies such as Stripe, Oura, Databricks, and OpenAI through exchange-traded funds listed on the New York Stock Exchange. “More than 150,000 retail investors participated in the IPO, so it’s pretty democratized,” Tenev said in an interview this week at the Wall Street Journal’s Future of Everything conference.
The fund, launched in March, comes at a time when the term “unicorn,” once used to describe rare, multibillion-dollar startups, has fallen out of fashion. When AI model providers like OpenAI and Anthropic are raising funding at valuations of $850 billion or more to $900 billion, you need another word besides “unicorn.”
“We call these companies frontier companies,” Tenev said, explaining how Robinhood distinguishes these large private companies from other startups.
“There are private companies raising capital at valuations in the low hundreds of billions of dollars. We’ll probably see multiple private companies reaching trillions of dollars. [in valuation] “Before the IPO, before retail investors can participate,” he said.
Robinhood’s early funds offer exposure to a number of technology companies that have not yet gone public, including OpenAI, which recently joined Mercor, Ramp, Airwallex, Boom, and more.
Tenev believes the new fund makes sense as part of Robinhood’s broader mission to democratize access to markets for retail investors.
Initially, the company achieved this through zero-commission trading, which significantly increased retailer participation in the public market. The company is currently considering investing in large private companies as its next step.
“What I can think of is [the new fund] As a publicly traded venture capital firm with day-to-day liquidity. “There’s no accreditation requirement, there’s no carry, so there’s no carry, just a competitive management fee. For those familiar with venture capital, typically when you invest in a fund as an LP, you pay a management fee, but there’s also usually about 20% carry, which means 20% of the profits go to the fund manager,” Tenev said in an interview.
Given the size of these companies, Tenev believes retail investors should be able to get in sooner than with an IPO, especially given that many companies are choosing to wait to go public.
“The aspiration is that if you’re a company raising a seed round and a Series A round, so just the initial capital, retail should be a big part of that round, just like in the public markets today,” Tenev said. “And we should get those people on the ground floor so they can actually benefit from this potential price appreciation that is happening more and more in the private market,” he added.
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