Robinhood Markets has filed confidentially for a second venture capital fund, RVII, just two months after listing its first publicly traded venture fund on the New York Stock Exchange. The move signals the company’s deepening push to open private market investing to everyday retail investors, a space historically reserved for wealthy accredited investors and institutional firms.
A broader investment net with higher risk
Unlike Robinhood’s inaugural fund, RVI, which holds stakes in 10 late-stage companies including OpenAI, Stripe, Databricks, and Revolut, the new fund will invest across growth-stage and early-stage startups. Early-stage companies are typically younger, unproven, and carry significantly higher risk, but they also offer the potential for outsized returns if they succeed. Robinhood has not yet set a fundraising target for RVII.
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The first fund, RVI, debuted on the NYSE at $21 per share in early March and has since more than doubled, closing at $43.69 on Monday. The sharp rise has been largely attributed to market enthusiasm for the AI-focused startups in its portfolio. The performance underscores the growing appetite for venture exposure among retail traders who have historically been locked out of private market gains.
Democratizing venture capital — with daily liquidity
Robinhood’s venture fund model is designed to address a long-standing structural gap in startup investing. Under U.S. federal securities rules, only accredited investors — those with a net worth exceeding $1 million or annual income above $200,000 — can invest directly in private companies. That restriction has kept most retail investors from participating in the earliest and often most lucrative stages of a company’s growth.
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Robinhood CEO Vlad Tenev outlined the vision at The Wall Street Journal’s Future of Everything conference last week. He described Robinhood Ventures as “a publicly traded venture capital firm with daily liquidity. No accreditation requirements and no carry.” Daily liquidity means shares can be bought or sold on any market open day, unlike traditional VC funds where capital is locked up for years. The absence of carried interest — the performance fee that venture firms typically take from profits — is another structural departure from conventional private equity.
What this means for retail investors
Over the past several years, the most valuable AI startups have gone from early-stage bets to companies worth tens or even hundreds of billions of dollars, with almost all of that appreciation occurring in private markets. For ordinary investors, that wealth creation has been largely inaccessible. Robinhood’s funds aim to change that by allowing anyone with a brokerage account to buy shares in a diversified portfolio of private startups.
Tenev’s longer-term ambition goes further. He envisions a future where retail investors participate in seed rounds and Series A rounds alongside traditional venture firms. “The aspiration is, if you’re a company raising a seed round and a Series A round — so, just first capital — retail should be a big chunk of that round,” Tenev said. “And we should let those people in at the ground floor.”
If that vision takes hold, it could fundamentally reshape how startups raise early capital. But it also carries significant risk. Early-stage startups fail at high rates, and retail investors may not have the same access to due diligence or risk assessment as professional venture firms.
Market context and regulatory arena
The timing of Robinhood’s second fund filing comes amid a broader regulatory push to expand retail access to private markets. The Securities and Exchange Commission has in recent years loosened some accredited investor definitions, but the vast majority of Americans still cannot invest directly in private companies. Robinhood’s publicly traded fund structure effectively bypasses those restrictions by letting investors buy shares in a fund that itself holds private company stakes.
The first fund’s strong performance, driven largely by AI-related holdings, has likely fueled confidence for the second fund. However, the fundraising environment remains uncertain. Robinhood initially sought $1 billion for RVI but ultimately fell several hundred million short of that goal. The company has not disclosed whether RVII will target a similar amount.
Conclusion
Robinhood’s second venture fund represents a continued bet that retail investors want exposure to private markets and that the company can deliver it in a regulated, liquid format. The success of RVI, buoyed by the AI rally, provides a strong proof of concept, but the shift into earlier-stage investing introduces greater risk. For now, Robinhood is positioning itself as a bridge between Wall Street’s venture capital world and Main Street’s trading apps — a role that could reshape startup finance if it gains traction.
FAQs
Q1: How is RVII different from Robinhood’s first venture fund?
RVII will invest in both growth-stage and early-stage startups, whereas RVI focuses on late-stage companies. Early-stage investing carries higher risk but also greater potential returns.
Q2: Can anyone invest in Robinhood’s venture funds?
Yes. Unlike traditional venture capital funds that require accredited investor status, Robinhood’s publicly traded funds can be bought and sold by anyone with a standard brokerage account.
Q3: What does ‘no carry’ mean for investors?
Carried interest is the share of profits that venture firms typically take from investment gains. Robinhood’s funds do not charge carry, meaning all investment returns go to shareholders, though standard fund expenses still apply.
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