On Friday, Robinhood cofounder and CEO Vlad Tenev rang the opening bell at the New York Stock Exchange. This time, he wasn’t celebrating the public offering of his own startup, but instead an investment fund that Robinhood launched that allows retail traders to get access to red-hot private companies like Databricks and Ramp.
Robinhood’s core philosophy has always been giving everyday users access to the same tools, such as options trading, as their institutional counterparts. Tenev argues that walling off such products to accredited investors contributes to the wealth gap. Robinhood’s mileage on this ethos has varied, with the platform only rebounding from the reputational hit of the 2021 GameStop debacle in recent years. But Tenev continues to double down on expanding the investment suite on his brokerage platform. That includes a recent foray into prediction markets—the new oracle of truth and hedging, or a new way to lose money on parlay bets, depending on who you’re asking.
But Tenev’s pet passion has been “blowing” open the door to private markets, as he said on CNBC last week. On the surface, it’s a noble project. Everyone wants access to companies like Anthropic and SpaceX, but only the most connected investors can get access—at least without paying exorbitant fees or buying into scams. When (and if) the private market equivalents of the Magnificent Seven go public, it’ll be the most elite firms on Wall Street raking in the profits. Over the summer, Tenev called it a “big tragedy” that all the excitement is in private markets.
But Robinhood’s attempts to create access for its retail users have been spotty at best. In June, Tenev announced a plan to offer European users tokenized versions of OpenAI shares. (“We did not partner with Robinhood, were not involved in this, and do not endorse it,” OpenAI responded on X.) Robinhood has been noticeably silent on any similar launches in the U.S., even under today’s anything-goes regulatory environment.
The new offering, however, seems more buttoned-up. Named Robinhood Ventures Fund I, the vehicle is closed-end, meaning that people can buy and sell shares with each other, but not redeem them with Robinhood for the underlying assets. The fund holds some of the most sought after private market tech companies—with other names including Mercor and Oura—though it notably doesn’t include the biggest names, like SpaceX, Anthropic, and Anduril (which has been on a warpath against secondaries). The prospectus lays out that Robinhood invests in the companies through different methods, from direct share purchases to special purpose vehicles.
The glaring challenge for investors will be the actual worth of the holdings. Venture firms might get access to private portfolio companies’ financials, but anyone who owns Robinhood Ventures Fund shares won’t. The prospectus says as much, stating plainly deep in the fine print, “There will be uncertainty as to the value of its portfolio investments.” We’ll soon see which is stronger: FOMO or fear of losing lots of money. The new fund’s shares traded down 11% on Friday.
Leo Schwartz
X: @leomschwartz
Email: leo.schwartz@fortune.com
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This story was originally featured on Fortune.com