- Robinhood is IPOing Robinhood Ventures Fund II (RVII), giving retail access to Y Combinator seed-stage startups.
- RVII charges 2% plus 20% on gains, versus Fund I’s 0% performance fee.
- Fund I fell 16% on debut before rebounding 30%, a taste of the volatility ahead.
Robinhood‘s first venture fund promised retail investors a piece of “frontier” companies like Databricks and Stripe, at no performance fee. Its second asks them to pay 20% of the gains for something riskier: unproven, seed-stage startups.
The company filed to raise up to $200 million for the fund, offering 7.6 million shares at $25 apiece and selling a further 400,000 shares itself, for Robinhood Ventures Fund II, also known as RVII, which is expected to list on the New York Stock Exchange under the ticker RVII on August 13, pending regulatory approval.
From “less risky” to seed stage
Robinhood Ventures Fund I raised $658.4 million when it went public in March, building a portfolio around late-stage names its CFO called “much less risky” than early ventures, with Databricks, Stripe, OpenAI, and SpaceX among them. It still fell 16% on its debut day before clawing back roughly 30%.
RVII inverts that thesis entirely. It launches with stakes in 80 private companies and will focus on seed-stage startups that are current or former Y Combinator participants, or founded by YC alumni, the accelerator that has backed more than 5,000 companies worth a combined $1.3 trillion, including over 100 unicorns, since 2005.
Tech Funding News has covered plenty of that pipeline directly, from AI safety startup atla to insurance platform Corgi, which turned YC-backed into unicorn status within four months of its Series A.
RVII is Robinhood’s second attempt this year at packaging private-market access for retail investors, following the same push European players like Scalable Capital have made through ELTIF structures, and one TFN has tracked through startups such as bunch, which is trying to solve the access problem from the infrastructure side.
The fee jump retail investors are absorbing
RVI charged no performance fee. RVII charges a 2% annual management fee plus a 20% incentive fee on realised gains. Total annual expenses come to roughly 4.18%, according to a regulatory filing reviewed by The Defiant.
Hedge funds charge that kind of structure. Retail ETFs do not. And this is for a portfolio Robinhood itself calls “speculative” with “substantial risk of loss” and no shareholder redemption rights.
One more thing worth knowing: Robinhood uses the “Y Combinator” name with permission, but Y Combinator does not sponsor, endorse, or take any responsibility for how RVII performs.
“The next generation of promising startups is being built today. 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,” said Sarah Pinto, head of Robinhood Ventures.
Rich Aberman, RVII’s portfolio manager and a former YC founder and visiting partner, added: “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.”
Goldman Sachs is lead bookrunner, with Citigroup, J.P. Morgan, UBS, and Wells Fargo as joint bookrunners. The share request window closes August 12.
The open question
Robinhood is saying the venture market’s structural shift, as companies stay private for a median of 14 years, up from five in 1999, meaning retail investors need exposure earlier, not just cheaper. Whether they will pay hedge-fund economics for the privilege, at the riskiest end of the venture spectrum, is the test RVII’s price will start answering within days of listing.
