Tomorrow, something interesting (and potentially dangerous) is expected to hit the market:
Robinhood’s new venture fund is slated to start trading. If history is any guide, the hype will be intense. Headlines will promise you access to some of the world’s most coveted private startups — names like Databricks, Ramp, and Oura.
The pitch is seductive. “Finally, retail investors can own the next generation of tech unicorns.”
But before you click the “buy” button tomorrow, let me warn you:
Don’t invest in the IPO.
The Illusion of Access
On the surface, Robinhood’s venture-capital fund looks promising.
It’s called Robinhood Ventures Fund I (RVI). You don’t need to be a wealthy “accredited” investor to get access to it, and you don’t need to write a big check.
Just buy the ticker — it goes public at $25 per share — and you’re in.
But here’s the big catch with RVI:
You’re not investing in startups. You’re investing in a fund that owns startups.
In this case, the distinction is highly significant. Let me explain.
This Fund Won’t “Behave” Rationally
To make its offering available to all, Robinhood created an investment vehicle called a closed-end fund.
Here’s what’s important to know about closed-end funds. The share price often has little to do with the value — the “net asset value” or “NAV” — of the companies inside the fund.
Such funds frequently trade at big premiums or discounts, or swing violently between the two extremes. Furthermore, these movements can persist for years.
In other words, even if the startups inside the portfolio crush it, the fund’s share price might not follow. Instead, the price will likely be driven by sentiment. And that’s a recipe for distortion.
Bottom line: excitement might drive RVI’s share price far above its net asset value — only for gravity to eventually take over.
Morningstar Calls it “Reckless” and a “Disaster”
Criticism about the fund from financial professionals has been jarring.
For example, Morningstar analyst Bryan Armour described RVI as “reckless” for average investors and warned it could be a “disaster.”
That’s unusually strong language in a world where analysts typically hedge their commentary.
But the concern is understandable. Investors may believe they’re buying access to the rocketship-like growth of the private markets — when in reality they’re buying a sentiment-driven fund.
Two Smarter Paths
So, if you’re seeking exposure to the private markets, what are your alternatives?
Here are two options — one for accredited investors, and one for non-accredited investors.
For Accredited Investors
If you’re an accredited investor (income of at least $200k, or net worth of at least $1 million), you can invest in private companies directly.
In other words, instead of buying a closed-end fund that holds Databricks or Oura, you can often access those shares through the “secondary platforms” — where early shareholders or investors sell some of their shares, and accredited investors buy them.
That removes the sentiment premium, and gives you clean exposure to these companies’ upside.
This is precisely what Crowdability helps our accredited readers do.
For Non-accredited Investors
Non-accredited investors have options, too.
Every month, hundreds of startups raise capital from everyday investors. Very few of these deals deserve your capital. But the right deals can help transform your financial future.
At Crowdability, we have a recommendation service that introduces you to a single, hand-picked private startup each month.
The minimum investments for these deals are just a few hundred dollars — and each one can potentially deliver venture-scale returns of 10x your money or more. Our track record proves it.
The Bottom Line
Robinhood’s venture fund will likely attract enormous attention tomorrow. And for many investors, it will feel like progress — a symbolic step toward broader access.
But access alone doesn’t create returns. Structure matters. Pricing matters. Timing matters. And buying a closed-end fund during peak enthusiasm has historically been a dangerous bet.
If you’d prefer the real thing, we can help.
To learn more, check out Private Market Profits, our premium recommendation service. And if you’d rather talk to someone, give us a call at 844-311-3191.
Happy investing,
Best Regards,
Founder
Crowdability.com
