A new fund called VCX lists tomorrow, and it's offering something retail investors have never had before: direct exposure to late-stage private companies like SpaceX, OpenAI, Anthropic, Databricks, and Anduril.
Normally, these companies are locked behind the velvet rope of venture capital—accessible only to accredited investors, institutions, and people who know people. For regular folks, the only way in has been to wait for an IPO, by which point most of the explosive growth has already happened.
So is this democratization of private markets, or just another way to separate retail investors from their money? Let's break it down.
What's VCX?
VCX is structured to give public market investors exposure to companies that are still private but far along in their growth cycles. Think Series D, E, or F funding rounds—these are billion-dollar valuations, not scrappy startups in someone's garage.
The pitch is simple: instead of waiting for SpaceX or OpenAI to IPO (which may never happen, by the way), you can buy shares of a fund that holds positions in these companies right now.
On paper, it sounds great. In practice, there are some serious questions you need to ask before jumping in.
The Fees
First up: fees. Venture capital funds are notorious for charging high management fees (usually 2%) plus performance fees (often 20% of profits). We don't yet have full details on VCX's fee structure, but if it follows industry norms, you're looking at paying significantly more than the 0.03% expense ratio of an S&P 500 index fund.
Those fees eat into returns. If VCX charges 2% annually, that means the underlying companies need to grow by at least 2% just for you to break even. Over a decade, that's a massive drag on performance.
The Liquidity Problem
Second: liquidity risk. Private companies don't have public share prices. The valuations VCX uses are based on the last funding round, which could be months or even years old. If raised money at a $150 billion valuation in 2025, that doesn't mean it's worth $150 billion today.
