Robinhood on Monday opened the order window for Robinhood Ventures Fund II, a closed-end fund that aims to give retail investors exposure to seed-stage startups from the Y Combinator ecosystem at an expected price of $25 per share.
The new vehicle extends Robinhood’s private-markets strategy beyond later-stage companies such as OpenAI and into seed investing, where failure rates are high. Robinhood is packaging that exposure in an exchange-listed product with no investment minimums and no accreditation requirement. It is the second vehicle of this kind the company has brought to market this year, following Robinhood Ventures Fund I, which listed on the New York Stock Exchange in March.
Offering terms and listing timeline
The offering includes 8 million shares in total, with 7.6 million shares sold by the fund and another 400,000 sold by Robinhood Markets. At the expected price, the deal would raise about $200 million. Underwriters also have a 30-day option to buy an additional 1.2 million shares.
Robinhood customers can request shares through the app until the order window closes on Aug. 12. The fund expects to list on the NYSE on Aug. 13 under the ticker RVII and launch with positions in 80 private companies. Goldman Sachs is serving as lead bookrunner, with Citigroup, J.P. Morgan, UBS, and Wells Fargo joining the underwriting group.
“The next generation of promising startups is being built today,” said Sarah Pinto, head of Robinhood Ventures. “With Robinhood Ventures Fund II, retail investors no longer have to wait until a company’s IPO to be part of an early growth journey.”
A Y Combinator-focused strategy
RVII will invest in companies that are current or former Y Combinator participants, or businesses whose founders have gone through the accelerator’s programs. According to the offering announcement, Y Combinator has funded more than 5,000 companies since 2005, with a combined value above $1.3 trillion, including more than 100 unicorns.
Robinhood’s disclosures also say Y Combinator does not sponsor or endorse the fund.
“As Robinhood Ventures scales, our mission is for it to become the norm that retail is represented in your seed or Series A cap table,” said Rich Aberman, the fund’s portfolio manager.
Structure, fees, and risk disclosures
The fund is structured as a business development company, or BDC, a closed-end fund regulated under the Investment Company Act of 1940. It is managed by Robinhood Ventures DE, an SEC-registered adviser owned by Robinhood Markets.
Investors will pay a 2% annual management fee and a 20% incentive fee on realized gains. Total annual expenses are estimated at 4.18%. Robinhood’s own materials describe the investment as “speculative,” warn of a “substantial risk of loss,” and say shareholders have no redemption rights. Shares can only be sold in the open market, where they may trade below the value of the fund’s holdings.
Fund I raised $658.4 million
Robinhood Ventures Fund I priced its IPO at $25 per share on March 6, reaching a fund size of $658.4 million and targeting later-stage private companies. In April, it bought about $75 million of OpenAI common stock. Its portfolio also includes Stripe, Databricks, Revolut, Ramp, ElevenLabs, Airwallex, Boom, Mercor, and Oura.
Running alongside Robinhood’s tokenized route
The venture fund strategy sits alongside Robinhood’s crypto-based route to similar demand. Last year, the company gave European users tokenized exposure to OpenAI and SpaceX, a move that drew an objection from OpenAI, which said it had not approved any transfer of its equity.
Robinhood has since launched its own blockchain with tokenized stocks. The venture funds, by contrast, provide private-market exposure through a registered fund structure.