Robinhood Files for Second Venture Fund RVII, Targeting Earlier-Stage Startups After AI-Fueled Rally

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Robinhood Files for Second Venture Fund RVII, Targeting Earlier-Stage Startups After AI-Fueled Rally

Robinhood Markets is doubling down on its bet to open private market investing to the masses. Just two months after listing its first venture fund on the New York Stock Exchange, the company has filed a confidential registration for a second fund, RVII, signaling a strategic expansion into riskier but potentially higher-reward territory.

What RVII Means for Retail Investors

The new fund, detailed in a confidential filing with regulators, will invest in a mix of growth-stage and early-stage startups. This marks a meaningful departure from Robinhood’s first fund, RVI, which currently holds stakes in 10 late-stage companies including OpenAI, Stripe, Databricks, and Revolut. Early-stage startups are younger, carry more risk, and often lack established revenue streams, but they also offer the potential for outsized returns — a trade-off historically reserved for wealthy accredited investors.

Under federal securities rules, only individuals with a net worth exceeding $1 million or annual income above $200,000 can invest directly in private companies. Robinhood’s venture fund structure bypasses those restrictions, allowing anyone with a brokerage account to buy shares in a portfolio of private startups with daily liquidity. “You can think of [Robinhood Ventures] as a publicly traded venture capital firm with daily liquidity. No accreditation requirements and no carry,” CEO Vlad Tenev said last week at The Wall Street Journal’s Future of Everything conference.

Performance and Market Context

Robinhood’s first fund, trading under the ticker RVI, debuted on the NYSE in early March at $21 per share. As of Monday’s close, it had more than doubled to $43.69. The rally has been fueled largely by market enthusiasm for the AI prospects of its underlying portfolio companies, which include artificial intelligence leaders like ElevenLabs and Databricks. The strong performance comes despite the fund falling several hundred million dollars short of its initial $1 billion fundraising target.

The fundraising target for RVII has not yet been set, the company said in a blog post. The broader premise behind both funds addresses a long-standing gap in who gets to participate in the earliest and most lucrative stages of a company’s growth. Over the past few years, the most valuable AI startups have gone from early bets to companies worth tens or hundreds of billions of dollars, with almost all of that appreciation happening in private markets, out of reach for most investors.

Why This Matters for the Broader Market

Tenev’s longer-term vision extends well beyond the current fund structure. “The aspiration is, if you’re a company raising a seed round and a Series A round — so, just first capital — retail should be a big chunk of that round, much like it now is in the public markets,” he said at the conference. “And we should let those people in at the ground floor, so that they can actually benefit from this potential appreciation that’s increasingly happening in the private markets.”

If that vision takes hold, it could fundamentally change how startups raise their earliest capital, with retail investors eventually sitting alongside venture firms in the earliest rounds, where the biggest returns are often made — and where a whole lot of money is lost, as well. The shift also raises questions about investor protection, due diligence standards, and the potential for increased volatility in early-stage funding markets.

Conclusion

Robinhood’s second venture fund represents a significant step in democratizing access to private market investments, leveraging the AI-driven rally that has boosted its first fund’s performance. By targeting earlier-stage startups, RVII carries higher risk but also the potential for greater returns, all while maintaining daily liquidity and no carry fees. As Tenev pushes toward a future where retail investors participate in seed and Series A rounds, the financial industry will be watching closely to see whether this model can sustainably bridge the gap between Main Street and Silicon Valley.

FAQs

Q1: How is RVII different from Robinhood’s first venture fund?
A: RVI invests in 10 late-stage companies like OpenAI and Stripe. RVII will target growth-stage and early-stage startups, which are riskier but offer higher potential returns.

Q2: Can anyone invest in Robinhood’s venture funds?
A: Yes. Unlike traditional venture capital, which is limited to accredited investors, anyone with a Robinhood brokerage account can buy shares in RVI and RVII with daily liquidity.

Q3: What does ‘no carry’ mean for investors?
A: ‘No carry’ means Robinhood does not take a percentage of investment profits, unlike conventional venture firms that typically charge 20% of returns as carried interest.

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