The pitch sounds irresistible. What if you could have invested in Stripe before its IPO? Or Databricks while it was still private? For decades, those opportunities have been locked behind doors marked "accredited investors only" — meaning you needed either $1 million in net worth or a $200,000 annual income just to get into the room.
Robinhood wants to change that. The company just launched Robinhood Ventures I (RVI), a $1 billion fund giving everyday retail investors access to pre-IPO shares of private companies. The initial portfolio includes Databricks, Revolut, Airwallex, Oura, Ramp, Boom Supersonic, and Mercor — plus rights to purchase Stripe shares after Stripe eventually goes public.
The fund will trade on the New York Stock Exchange under the ticker RVI at $25 per share, accessible through any ordinary brokerage account. No minimum net worth required.
And here is where I put on my skeptic hat — because the financial industry has a long, well-documented history of democratizing access to things that, upon closer inspection, weren't that great a deal for the people who got access.
Why Private Market Access Isn't the Gift It Looks Like
The dirty secret of late-stage private investing is that by the time a company gets to the stage where a fund like RVI can access it, the best returns have often already been made. Early venture investors who got in at seed-round prices have already captured the enormous multiple. By the time a company is valued at $10 billion or $50 billion in private markets, you're frequently paying a price that reflects near-IPO expectations — with none of the liquidity protections that come with being a public company investor.
The history on this is not encouraging. WeWork was valued at $47 billion in private markets in 2019 — then nearly went bankrupt within months and listed at a fraction of that figure. Klarna, the buy-now-pay-later company, was valued at $45.6 billion in 2021 before a financing round the following year slashed that valuation to $6.7 billion — an 85% markdown in under 18 months. In both cases, late-stage private investors who paid peak prices were effectively buying a compelling story, not a business with the fundamentals to support the price.
The companies in RVI's portfolio are not WeWork — Databricks in particular is a genuine business with real, growing revenue. But the principle applies: private valuations are set by negotiations between sophisticated parties with asymmetric information, not by open market price discovery. You cannot always be sure that $25 per RVI share reflects anything other than what Robinhood's deal team was willing to pay.
Three Questions Every Investor Should Ask Before Participating
1. What are the fees? Robinhood has not published a clear expense ratio for RVI. Management fees on private fund structures typically run 1.5-2.5% annually, plus carried interest on any gains. Over a multi-year holding period, fees compound just as returns do — in the wrong direction. Until the fee structure is fully transparent, you cannot calculate whether the expected return justifies the risk you're taking.
2. What is the liquidity? Unlike buying a public stock, early-stage private investments are fundamentally illiquid. RVI will trade on the NYSE, which provides some secondary market — but closed-end fund structures like this routinely trade at discounts or premiums to their underlying net asset value, and in stressed markets that discount can widen dramatically. This is not money you should put in if you might need it within three to five years.
3. When were these valuations set? Interest rates have risen substantially since the 2020-2021 era when many of these companies raised at peak private valuations. A company worth $10 billion at near-zero interest rates may be worth $6-7 billion at current rates, even if the underlying business has grown. Private fund marks often lag economic reality by one to two quarters — meaning the NAV you see may not reflect today's true market value.
The Bottom Line
Robinhood's instinct here — that retail investors deserve access to private markets — isn't wrong. The current system, where early-stage wealth creation flows almost exclusively to institutions and wealthy individuals, has real fairness problems.
But democratizing access to an asset class doesn't automatically make that asset class a good investment at the price being offered. The question isn't whether you can invest in Databricks before its IPO. It's whether you're paying a fair price to do so, with clear fees and honest disclosure about what you're actually getting.
If they can't explain the fee structure clearly, and if the valuation methodology isn't transparent, that's your answer.
Proceed carefully.
