Robinhood launches Robinhood Ventures (RVI), a closed-end fund that will give ordinary retail investors access to private technology companies (Databricks, Stripe, Revolut, etc.).
Key points:
The problem is that companies are staying private longer, and only accredited and wealthy investors have access to them. 80–85% of Americans cannot invest in them.
RVI's solution — a fund with no accreditation requirements, daily liquidity (traded as an ETF), no carry (manager's share of profits), and a portfolio of 7–15 leading companies. The fund can continue to hold its position when a company goes public.
Robinhood uses its base of 27 million customers and connections in Silicon Valley to "knock out" allocations from top private companies. At first, there were many refusals, but interest is growing — companies are starting to reach out themselves.
Overall, this is Robinhood's next step in "democratizing finance" after previously opening up access to IPOs for retail investors.
without accreditation, traded as an ETF, in the form of a portfolio of 7–15 top companies