Robinhood said Robinhood Ventures, its venture arm, will launch Robinhood Ventures Fund II, or RVII, with the fund expected to list on the New York Stock Exchange on Aug. 13 Eastern Time. The expected IPO price is $25 per share. Retail investors and independent registered investment advisors on the TradePMR Fusion platform can begin submitting IPO purchase requests immediately, and the subscription window is scheduled to close on Aug. 12.
Fund structure and Y Combinator focus
Robinhood Ventures Fund is structured as a Business Development Company, or BDC. The newly issued RVII is a closed-end fund designed to give retail investors exposure to early-stage startups. The fund pools assets under professional management and trades in a format similar to stocks.
Robinhood said the fund currently holds equity stakes in 80 private companies. Its portfolio is focused on existing and alumni startups from Y Combinator, as well as other standout early-stage companies founded in prior years. According to the article, Y Combinator has backed more than 5,000 companies since 2005, with aggregate valuation exceeding $1.3 trillion, including 100 unicorns valued at more than $1 billion.
Robinhood said its partnership with Y Combinator is intended to help investors diversify across asset classes while also directing seed capital toward startups with growth potential.
What Robinhood executives said
Sarah Pinto, head of Robinhood Ventures, said Robinhood Ventures Fund II gives retail investors a way to participate in the early growth stage of startups without waiting for those companies to go public.
Rich Aberman, portfolio manager of Robinhood Ventures Fund II, said Robinhood Ventures continues to grow in scale and that Robinhood’s goal is to secure a place for retail investors on the cap table in seed rounds or Series A financings.
Fees and incentive structure
RVII has appointed Robinhood Ventures as its investment adviser. The fee structure includes two main components:
- A base management fee calculated at 2.00% annually on net assets and paid quarterly.
- An incentive fee calculated and paid annually at 20% of realized capital gains from inception through the end of the fiscal year, after deducting realized capital losses, unrealized capital depreciation, and any incentive fees paid previously.
How subscriptions will work
Investors can apply for RVII IPO allocations directly through the Robinhood platform. Eligible registered investment advisors can submit an indication of interest, or IOI, on the TradePMR platform on behalf of clients, and then confirm client demand during the Conditional Offer to Buy, or COB, window before final pricing and allocation.
After the IPO is completed, all investors will be able to view the fund’s performance metrics, charts, and latest updates, including new companies added to the fund each quarter.
Robinhood said RVII is expected to hold discussions every quarter with new companies from Y Combinator and other institutions, then select the most promising companies for investment.