Robinhood starts roadshow for retail fund backing Y Combinator startups

Why it matters

Robinhood is packaging seed-stage venture risk for public-market buyers while collecting management fees and carried-interest-style upside from an illiquid portfolio it must value itself.

Vlad Tenev (@vladtenev) is taking Robinhood deeper into venture capital with a second publicly traded fund, this time giving retail investors exposure to dozens of early-stage startups tied to Y Combinator.

Robinhood began the roadshow for Robinhood Ventures Fund II, or RVII, on Monday, August 3rd, following a Bloomberg report on the proposed offering. RVII plans to list on the New York Stock Exchange, though its registration has yet to become effective and Robinhood cannot sell shares until the Securities and Exchange Commission clears the offering.

The structure extends the access pitch Tenev and co-founder Baiju Bhatt built Robinhood around. Tenev and Bhatt, who met at Stanford and previously built trading systems for financial institutions, founded Robinhood in 2013 to bring stock-market access to smaller investors. RVII applies that same distribution strategy to an asset class where access, pricing and reliable information remain heavily controlled by founders and venture firms.

Robinhood is marketing the fund around Y Combinator's network. RVII will primarily invest in current and former YC participants, along with startups whose founders previously joined the accelerator. Y Combinator has permitted Robinhood to use its name, but does not sponsor, endorse or manage the fund, according to Robinhood's roadshow announcement.

Robinhood moves down the venture curve

RVII is a riskier extension of Robinhood Ventures Fund I, which concentrated on larger private businesses including Databricks, Stripe, Ramp, Revolut and Oura. The first fund priced its March IPO at $25 a share and closed its first trading day at $21, a 16% decline, after raising less than its initial $1 billion target, TechCrunch reported.

Robinhood later added OpenAI to that portfolio. In an annual report, the fund said it bought about $75 million of OpenAI common stock on April 17th. At the end of March, only 48.3% of Fund I's net assets had been deployed into private companies, leaving much of its capital in money-market funds while Robinhood sought additional deals.

Fund II starts much earlier. Its preliminary prospectus shows a portfolio built largely from simple agreements for future equity, or SAFEs, commonly used for seed-stage financings. Most disclosed investments were $250,000 apiece. They included Agentic Fabriq, which is building infrastructure for AI agents; Apollo Atomics, a compact nuclear-reactor startup; Asimov Robotics, which collects human-motion data for humanoid robots; Cumulus Compute Labs, a serverless GPU provider; and CellType, an AI drug-discovery startup.

One disclosed exception was a $1 million SAFE investment in Shortwave Communications, which develops AI agents intended to complete workflows from end to end. The portfolio spans AI software, robotics, health care, nuclear energy, space technology, financial infrastructure and defense-related systems.

These holdings give retail investors access to a wider group of startups than Fund I, with thinner financial histories and fewer observable prices. Robinhood initially recorded most of the SAFEs at cost. That approach leaves the fund dependent on later financing rounds, acquisitions or other events to establish clearer values.

A 2-and-20 fee structure

Robinhood also stands to earn more if RVII performs. Under the fund's investment advisory agreement, Robinhood Ventures will collect an annual base management fee equal to 2% of net assets. It will also receive 20% of cumulative realized capital gains after accounting for realized losses and unrealized depreciation.

That incentive fee marks a meaningful change from Fund I, which launched without a performance fee. The structure gives Robinhood a recurring management-fee business and a share of successful exits while investors absorb the losses, trading volatility and valuation uncertainty.

The preliminary prospectus acknowledges the resulting tension. Robinhood Ventures will determine the fair value of investments that lack reliable market quotations, and those valuations affect the size of its management fee. The filing warns that the adviser could have an incentive to assign values above what the investments would fetch in a sale.

The market price introduces another layer. RVII will be a closed-end business development company, so its shares can trade above or below the reported net asset value. Investors receive daily liquidity in the listed fund, while the underlying startup stakes remain illiquid and may take years to produce an exit. A buyer can therefore pay a premium for a portfolio whose holdings cannot be readily sold or independently priced.

Sarah Pinto, Robinhood Ventures' chief investment officer, and Richard Aberman will manage the portfolio. Pinto previously spent more than seven years leading growth investments at Emerson Collective after roles at Spectrum Equity, Great Hill Partners and Bridgepoint. Aberman co-founded YC-backed payments startup WePay, which JPMorgan Chase acquired in 2018, and later worked as a visiting partner at Y Combinator.

That team gives Robinhood direct experience on both sides of startup financing. Distribution remains Tenev's advantage. Robinhood can market the fund inside the same brokerage used to trade it, turning demand for private-company access into fees even when the underlying startups remain years from a public listing.