FinTech News
Robinhood to Bring Private Company Exposure to Retail Investors
Robinhood is continuing its mission to democratize finance with the impending launch of Robinhood Ventures.
About Robinhood Ventures Fund:
This week, Robinhood announced its intent to launch Robinhood Ventures Fund I (RVI). The brokerage has taken the first step toward launch by filing an initial registration statement on Form N-2 with the Securities and Exchange Commission. Once approved, RVI will be a closed-end fund intended to give retail customers a chance to invest in private companies.
As a blog post from Robinhood notes, this development comes as the number of publicly traded companies has fallen. In the year 2000, there were around 7,000 public companies in the United States, versus 4,000 as of last year. At the same time, valuations for private companies have continued to grow.
According to Robinhood, RVI will feature a “concentrated portfolio of private companies at the frontiers of their respective industries.” The intent is for the fund to hold investments long-term, including beyond any potential IPO.
Once Robinhood’s Form N-2 registration is reviewed and approved by the SEC, the company intends to trade shares on the New York Stock Exchange under the ticker symbol $RVI. This will not only allow investors on Robinhood to buy and sell the fund, but will enable other broker users to do so as well.
This latest news from Robinhood comes on the heels of the app’s recent $HOOD Summit. Additionally, the company’s stock will officially become a part of the S&P 500 on September 22nd.
What They’re Saying:
Commenting on the launch of RVI, Robinhood chairman and CEO Vlad Tenev said, “For decades, wealthy people and institutions have invested in private companies while retail investors have been unfairly locked out. With Robinhood Ventures, everyday people will be able to invest in opportunities once reserved for the elite.”
My Thoughts:
It feels as though I’ve been writing a lot about Robinhood lately. But, in my defense, that’s only because they’ve been doing some really interesting things — including this plan to launch Robinhood Venture Fund I. To me, this sounds like a perfect extension of their brand and will be a feature that they can easily market.
As for whether I’ll be investing in the fund, that certainly depends. At this point, we don’t really have any idea as to what companies will be included. Then again, since Robinhood does allow users to purchase fractional shares of stocks and ETFs, I’d be willing to invest at least a few dollars and see how this new Venture works out.
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