Retail traders are famously locked out of the startup world. Robinhood is trying to vary that by permitting most of the people to spend money on a portfolio of what it calls “a number of the most enjoyable non-public firms working right now.”

To do that, the corporate that pioneered the commission-free brokerage mannequin has secured entry to eight startups—together with Databricks, Stripe, Mercor, and Oura—grouping them right into a car known as Robinhood Ventures Fund I. The fund, which additionally contains Ramp, Airwallex, Revolut, and Growth, set out final month with an formidable $1 billion goal, however demand for this novel manner of investing in non-public firms was decrease than anticipated.

On Thursday, Robinhood introduced the fund had raised $658.4 million — which may attain $705.7 million if underwriters train their full allotment. The shares, priced at $25 within the providing, started buying and selling on Friday and closed the day at $21, a 16% decline.

RVI’s reception on Wall Avenue stands in stark distinction to a different try to provide particular person traders publicity to buzzy startups. When Future Tech100 — a publicly traded, closed-end fund holding stakes in 100 venture-backed firms together with SpaceX, OpenAI, and Discord — direct-listed on the NYSE in March 2024, its shares surged from a reference worth of $4.84 to a gap commerce of $8.25, ultimately closing its first day at $9.00.

Future Tech100 has stored climbing since its public debut. The fund closed buying and selling on Friday at $26.61, a 33% premium to its web asset worth of $19.97, which means its shares commerce nicely above the precise worth of its underlying holdings.

So what explains why retail traders aren’t almost as enthusiastic about Robinhood’s fund as they’re about Future Tech 100? The most probably clarification is RVI’s lack of publicity to the businesses broadly anticipated to go public at huge valuations: OpenAI, Anthropic, and SpaceX.

Robinhood is trying to tackle this. RVI intends so as to add extra startups to the fund, ultimately aiming to carry what Robinhood Ventures President Sarah Pinto described to TechCrunch as “15 to twenty of the very best late-stage progress firms on the market.”  The corporate’s CFO, Shiv Verma, told Axios Pro on Friday that Robinhood is eyeing publicity to OpenAI.

However securing entry to those high-profile firms is way from simple. Robinhood is aiming to get straight onto their cap tables straight via main capital raises or secondary share gross sales — and that’s tough even for a agency with deep roots in Silicon Valley.

A cap desk — the official file of who owns fairness in an organization — is intently guarded at most high-profile startups, and successful a spot on one requires both being invited by the corporate or buying shares from current traders with the corporate’s blessing.

“It’s very tough to get into any of those firms, and the funding rounds are very costly,” acknowledged Pinto.

That’s simply one of many causes democratizing non-public markets is simpler stated than completed, and why the businesses most retail traders truly need to personal stay, for now, out of attain.