Robinhood launches venture fund for start-ups

Robinhood, the trading platform that shook up stock and crypto markets by bringing them to retail traders, is now betting big on venture capital. The company is preparing to launch a new investment vehicle that would give everyday investors access to privately held start-ups — a corner of the market traditionally reserved for wealthy individuals and large institutions.

Introducing Robinhood Ventures Fund I

According to filings reviewed by DealBook, Robinhood is registering a closed-end fund with the Securities and Exchange Commission that will trade on the New York Stock Exchange. Dubbed Robinhood Ventures Fund I, the vehicle will focus on a “concentrated portfolio” of leading start-ups across multiple industries, pending SEC approval.

The move is Robinhood’s latest attempt to widen access to private markets, following its summer rollout of crypto-based stock tokens in the European Union. Those tokens, which are linked to securities in over 200 companies, drew sharp attention — and controversy — when Robinhood gave away $1.5 million worth of tokens tied to OpenAI and SpaceX. OpenAI later clarified it had no involvement, and Robinhood acknowledged that the tokens weren’t technically equity instruments but were instead linked to its stake in a special-purpose vehicle. Regulators in Lithuania, Robinhood’s EU overseer, are still seeking clarification on the product.

Why Robinhood Is Making the Move

Robinhood is pointing to structural shifts in U.S. markets:

• The number of publicly listed companies has fallen dramatically over the past two decades.
• At the same time, the value of private start-ups has exploded. OpenAI, for instance, saw its valuation surge from $157 billion last fall to $500 billion just last month.

“For decades, wealthy people and institutions have invested in private companies while retail investors have been unfairly locked out,” said Vlad Tenev, Robinhood’s co-founder and CEO. “With Robinhood Ventures, everyday people will be able to invest in opportunities once reserved for the elite.”

The Risks Ahead

The initiative could spark new debates about the dangers of democratizing high-risk investments. Real estate funds marketed to individual investors — including those managed by Blackstone and Starwood — have faced steep losses in recent years. Critics argue that exposing retail investors to the volatility of venture capital could result in similar blowbacks.

Still, Robinhood appears undeterred. By bridging the gap between Main Street and Silicon Valley, the platform is positioning itself as a pioneer in giving the masses access to start-ups once available only to the wealthy few. Whether regulators — and investors — embrace the idea remains to be seen.