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Robinhood opens YC access
Robinhood unveiled plans for Robinhood Ventures Fund II (RVII), a publicly traded fund expected to list on the New York Stock Exchange on August 13 at an opening price of $25 per share.
“expected to become a publicly traded fund on August 13 at an opening price of $25 per share”
The fund is designed to let retail investors back Y Combinator startups through a fund structure that invests in companies founded by current and former Y Combinator participants, should those startups agree to sell their shares.
Robinhood’s filing also says it will raise as much as $200 million, and it will offer 7.6 million shares at $25 each while Robinhood separately sells another 400,000 shares.
TechCrunch reported that while retail investors can buy shares in the fund, they will not directly hold any shares in the startups, and it’s unclear how much profit they can expect if the YC companies have big exits.
Fees and fund structure
The new venture fund introduces a fee structure that Robinhood Ventures Fund I did not have, with a 2% management fee and a 20% performance fee.
TechCrunch said the fund intends to pay the 2/20 fees typical in the VC world to another entity owned by Robinhood, plus tack on extra fees, with the total described as just over 4%.
Crypto News reported that RVII will charge a 2% annual management fee alongside a 20% incentive fee on realized gains, and that the subscription window is scheduled to close on Aug. 12, one day before the fund is expected to begin trading on the NYSE.
The fund is structured as a business development company, or BDC, and Bitget said it is “a publicly traded vehicle that pools investor money and deploys it into private businesses that don’t trade on stock exchanges.”
What’s at stake for investors
Robinhood Ventures Fund II is expected to launch with holdings in about 80 private companies and focus on seed-stage businesses linked to Y Combinator, including current participants, former participants and companies founded by YC alumni.
“RVII will launch with holdings in about 80 private companies”
Tech Funding News said RVII launches with stakes in 80 private companies and will focus on seed-stage startups, while also describing the portfolio as “speculative” with “substantial risk of loss” and noting that shareholders will not have redemption rights.
TechCrunch reported that RVII doesn’t appear to have an end date for returning remaining profits to investors and doesn’t appear to promise regular distributions of cash profits, leaving investors to bank on returns from the fund’s rising stock price.
The Tech Buzz also framed the regulatory pathway as an open question, noting that the SEC has historically restricted private company investments to accredited investors earning over $200,000 annually or holding over $1 million in assets excluding their home.
