Robinhood to list a second fund giving retail investors a stake in Y Combinator startups

Robinhood this week unveiled a financial instrument that lets retail investors feel like they, too, can profit from backing Y Combinator startups. Robinhood Venture Fund II (RVII) is expected to become a publicly traded fund on August 13 at an opening price of $25 per share. The fund intends to raise as much as $200 million, according to Reuters, and use that money to invest in startups founded by current and former Y Combinator participants, should those startups agree to sell their shares.

Any retail investor can buy shares in the fund, but investors will not directly hold shares in the underlying startups — they can trade shares in the fund itself, though it’s unclear how much profit they could see even if the YC-backed companies have major exits. The fund intends to pay the 2/20 fee structure typical in venture capital to another Robinhood-owned entity, plus additional fees, bringing the total to just over 4%: a 2% management fee on net returns, plus 20% “carried interest” on any resulting profits. Unlike typical VC funds, which run for roughly 10 years, RVII doesn’t appear to have an end date for returning remaining profits to investors, nor does it appear to promise regular cash distributions — investors may largely have to rely on the fund’s share price rising.

It is possible to make money trading the fund’s shares: Robinhood Ventures Fund I (NYSE: RVI), also created to buy shares in private companies like Databricks, Mercor, and OpenAI, routinely trades above its $21 IPO price. But it’s equally possible to lose money — after peaking above $56 in May, RVI’s stock now trades around $28 per share. Robinhood has faced pushback before over financial products tied to valuable private companies’ names: in 2025 it sold crypto assets described as tokenized shares of OpenAI and SpaceX, which OpenAI publicly condemned, saying it wasn’t involved and that the tokens didn’t represent any actual holdings in the company. RVII, by contrast, appears to operate more like a special purpose vehicle than that 2025 crypto product, buying actual shares in the underlying startups.

Why it matters

Wrapping Y Combinator’s startup pipeline into a tradable public security extends the retail-investor access to hot private companies that Robinhood pioneered with RVI, testing whether public markets will reward a structure that charges VC-style fees without VC-style liquidity terms.