Robinhood plans to launch a startups fund open to all retail buyers 

Robinhood announced Monday it has filed an software with the U.S. Securities and Trade Fee to launch a brand new publicly traded fund that can maintain shares of startups.

The thought behind the “Robinhood Ventures Fund I” is to permit each retail investor entry to make cash on the most well liked startups earlier than they go public.

Whereas the present model of the application is public, Robinhood hasn’t crammed within the fine-print but. This implies we don’t know what number of shares it plans to promote, nor different particulars just like the administration price it plans to cost. It’s additionally unclear which startups it hopes this fund will ultimately maintain. The paperwork says it “expects” to spend money on aerospace and protection, AI, fintech, robotics in addition to software program for shoppers and enterprises.  

Robinhood’s massive pitch is that retail buyers are being unnoticed of the positive factors which can be amassed by startup buyers like VCs. That’s true to an extent. “Accredited buyers” — or these with a web value giant sufficient to deal with riskier investments — have already got a wide range of methods of shopping for fairness in startups, akin to with enterprise companies like OurCrowd.  

Retail buyers that aren’t wealthy sufficient to be accredited have extra restricted choices. There are funds much like what Robinhood has proposed, together with Cathy Wooden’s ARK Enterprise Fund, a mutual fund which holds stakes in corporations like Anthropic, Databricks, OpenAI, SpaceX, and others. 

Robinhood’s final such effort was controversial. The buying and selling firm launched what it called private “tokenized” stocks within the EU earlier this 12 months, implying these tokens gave retail buyers the power to make cash from shares of personal corporations like OpenAI. Nonetheless, OpenAI denounced the product, declaring that consumers of those tokens weren’t really shopping for OpenAI inventory — tokenized or in any other case. They had been merely shopping for tokens pegged to costs of a personal firm’s inventory.

This new closed-end “Ventures Fund I” is a extra traditional, mutual fund-style, method. As to when Robinhood’s new fund can be obtainable we don’t know that both but. Robinhood, which is in a quiet interval, declined to remark.