"Robinhood announced Monday it has filed an application with the U.S. Securities and Exchange Commission to launch a new publicly traded fund that will hold shares of startups. The idea behind the "Robinhood Ventures Fund I" is to allow every retail investor access tomake money on the hottest startups before they go public. While the current version of the application is public, Robinhood hasn't filled in the fine-print yet."
"This means we don't know how many shares it plans to sell, nor other details like the management fee it plans to charge. It's also unclear which startups it hopes this fund will eventually hold. The paperwork says it "expects" to invest in aerospace and defense, AI, fintech, robotics as well as software for consumers and enterprises. Robinhood's big pitch is that retail investors are being left out of the gains that are amassed by startup investors like VCs."
"Robinhood's last such effort was controversial. The trading company launched what it called private "tokenized" stocks in the EU earlier this year, implying these tokens gave retail investors the ability to make money from shares of private companies like OpenAI. However, OpenAI denounced the product, pointing out that buyers of these tokens were not actually buying OpenAI stock - tokenized or otherwise. They were simply buying tokens pegged to prices of a private company's stock."
Robinhood filed an application with the SEC for a publicly traded closed-end fund called Robinhood Ventures Fund I that would hold shares of startups. The fund aims to give retail investors access to pre-IPO startup gains typically captured by venture investors. The filing is public but lacks fine print, so share count, management fees, and target holdings remain unspecified. The paperwork indicates expected investments across aerospace and defense, AI, fintech, robotics, and consumer and enterprise software. Accredited investors already have access to startup equity; non-accredited retail investors face more limited options. A prior Robinhood tokenized-stock product drew controversy and an OpenAI denouncement.
Read at TechCrunch
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