Robinhood is the latest to jump on the bandwagon of offerings opening up access to the private markets. For years, everyday investors have been locked out of asset classes like venture capital and private equity- mostly due to regulatory and technological constraints. Given that pent-up demand, it’s no surprise that Robinhood—synonymous with democratizing access to public markets—now wants to do the same for private ones.
Their entrance sparks a broader conversation: how has retail access to private markets evolved, where does Robinhood’s announcement fit, and what does it mean for investors?
A bit of Background
Robinhood Ventures I (RVI) is part of a new wave of funds investing into private assets - venture capital, private equity and private credit. In Robinhood’s case, they plan to invest into pre-IPO private companies - think SpaceX or Stripe. These funds - known as closed-end funds - are close cousins of ETFs and Mutual Funds. They have no limits on the number or types of investors and are broadly accessible to anyone trading on the NYSE or Nasdaq.
How will Robinhood Venture I (RVI) fund work?
Like a private company going public, closed-end funds raise a pool of capital through an initial offering and then list their shares via an IPO. After the IPO, the fund deploys the capital into companies that meet its strategy. Once listed, RVI shares will be tradable on the NYSE during market hours.
Robinhood says RVI will invest in “ best-in-class growing companies at the frontiers of their respective sectors and industries.” It will acquire shares of these companies through initial and secondary transactions (buying from existing investors) as well as mechanisms like forward contracts. Once capital is fully deployed, investors can still trade shares on the NYSE, but RVI won’t raise new funds unless it does a secondary offering.
Why it matters
The shift toward broader retail access to private markets has been building for a decade. Robinhood’s move isn’t the beginning, but it is significant—given their track record of democratizing investing. The key question isn’t that Robinhood entered the space, but how.
They chose a closed-end fund structure with listed shares on the NYSE. That decision is notable because closed-end funds, while long-standing, aren’t especially popular. The number of such funds has declined for 13 consecutive years—down 40% since 2011.* Historically, they often trade at a discount to their net asset value (NAV) or experience sharp volatility, as seen with Destiny.xyz’s similar fund launched in 2024.
So it begs the question: Why did Robinhood choose this route? And is it the best way for everyday investors to access private markets?
How to think about the Ecosystem
To understand that, we first need to understand how the ecosystem for private market access has evolved.
Traditional private funds
When you think of venture capital, you likely think A16Z, Lightspeed, or General Catalyst. These firms raise from large institutions and ultra-wealthy individuals. Everyday investors don’t get in for two reasons:
They don’t need small checks. Endowments and institutions write multi-million-dollar commitments. Our measly $5k-$10k check pales in comparison.
They’re capped. Private funds face strict limits on the number of investors, forcing each check to be large
Add in accreditation or qualification requirements, and retail access is basically off the table.
You likely aren’t going to see A16Z open up a retail investor fund in the next decade. They don’t need to nor would they even be able to do so easily with current regulation.
Enter Interval Funds
In the early 2020s, wealthy individuals wanted into private markets too. Institutional fund managers like KKR and Blackrock responded by launching interval funds.
Blackrocks’ Credit Strategies or The Private Shares Fund - both interval funds - allow investors to buy in daily but typically redeem only a few times a year. This structure removed the investor-count cap, eliminating one of the biggest barriers to making the private markets available to all. Investors could now invest directly for as little as $2,500. Unlike Robinhood’s Venture I fund, interval funds don’t IPO or list on an exchange. So how do everyday investors even find them?
One other piece of the puzzle still needed to be solved: How do these fund managers get their funds into the hands of retail investors at scale.
This is where the fintechs stepped in.
What role have fintechs played?
High Net Worth investors have been able to access these new interval funds through their financial advisors or platforms focused exclusively on this market, like iCapital, for the last 10+ years.
But the massive surge in market participation by retail investors combined with the growing opportunity in private markets has opened up the door for fintechs to play a leading role in providing access to retail investors.
Brokerages like Sofi began listing interval funds directly in their app, opening the door to everyday investors without accreditation requirements.
Robinhood has been watching this all evolve and finding the right time and way to throw themselves into the mix.
Robinhood’s take on the next evolution
Robinhood’s choice of the closed-end fund structure makes sense for its audience. Once listed, shares of these funds are highly liquid, demand-driven, and tradable—appealing to their active trader market.
By contract, interval funds like Fundrise’s Innovation Fund or The Cashmere Fund target long-term investors with a 7-19 year horizon. While they allow occasional redemptions, they market these for emergency liquidity only. Most
Most importantly, shares of interval funds like these don’t list on an exchange and are not tradable. This might seem boring to some but it’s very much in line with how traditional venture capital and private equity investing is intended to work.
Robinhood’s Venture Fund (RVI) is different. It allows investors to buy in and out of a private market fund intraday. For a fintech like Robinhood that appeals to active traders, being highly tradable is likely a must. However, it’s a somewhat new motion for private markets that have traditionally been less liquid and slow moving when it comes to pricing.
To see the difference, consider this example: Both The Private Shares Fund (interval fund) and Robinhood Ventures Fund (RVI) might hold SpaceX. In either case, you’d get exposure to SpaceX.
The key distinction is that RVI lets retail investors actively trade its shares on an exchange, while the Private Shares Fund does not.
But that raises an important question: what exactly are you trading on? SpaceX doesn’t release quarterly reports or other public disclosures. So how does an investor know whether they’re buying at a fair price—or simply trading on news headlines and hype?
With interval funds, investors buy in at the fund’s net asset value (NAV), which reflects the underlying value of its holdings. RVI will also publish a NAV, but its exchange-listed share price doesn’t need to match it. In practice, those prices often diverge—and can swing dramatically.
We saw these questions play out with Destiny.xyz, where the share price was massively volatile for months. Given private markets don’t have the same standards on reporting and availability of market data, it’s entirely possible the RVI shares follow a similar trend for months.
The Bigger Picture
Robinhood isn’t the first to open retail access to private markets, but they are among the first to enable trading of those assets at scale. SEC filings already show a growing pipeline of both closed-end and interval funds aimed at retail.
What makes Robinhood unique is that it isn’t just distributing these funds—it’s running one itself. That move could push other brokerages to follow.
Robinhood may not have started the movement, but they are certainly accelerating it. RVI won’t be the only option for everyday investors, but it could prove to be an important test case for the convergence of private markets and tradable assets.
*The number of traditional CEFs continued to fall, from 401 funds at year-end 2023 to 382 funds by year-end 2024. The number of traditional CEFs has fallen for 13 consecutive years and is down 40 percent from year-end 2011 https://www.ici.org/doc-server/pdf%3Aper31-04.pdf
