On Monday, Robinhood revealed that it has submitted an application to the U.S. Securities and Exchange Commission to create a new publicly traded fund aimed at acquiring shares of startups.

The concept behind the “Robinhood Ventures Fund I” is to provide all retail investors the opportunity to profit from the most promising startups prior to their public offerings.

Although the current iteration of the application is accessible to the public, Robinhood has yet to include the detailed terms. Consequently, the number of shares it intends to sell and additional specifics, such as the management fee, remain unknown. It’s also uncertain which startups the fund aims to include. The documentation indicates it “anticipates” investing in aerospace and defense, AI, fintech, robotics, as well as consumer and enterprise software.  

Robinhood’s key argument is that retail investors are missing out on the profits enjoyed by startup investors like VCs. This holds some truth. “Accredited investors” — those with sufficient net worth to handle riskier investments — already have numerous avenues to acquire equity in startups, including venture firms such as OurCrowd.  

Retail investors who do not qualify as accredited have fewer options. There exist funds akin to Robinhood’s proposal, such as Cathy Wood’s ARK Venture Fund, a mutual fund that owns shares in companies like Anthropic, Databricks, OpenAI, SpaceX, and others. 

Robinhood’s previous attempt at this was met with controversy. Earlier this year, the trading company introduced what it referred to as private “tokenized” stocks in the EU, suggesting these tokens allowed retail investors to benefit financially from shares of private firms like OpenAI. However, OpenAI rejected the offering, stressing that purchasers of these tokens were not actually acquiring OpenAI stock — tokenized or otherwise. They were merely purchasing tokens linked to the valuations of a private company’s shares.

This new closed-end “Ventures Fund I” adopts a more traditional mutual fund approach. As for the availability of Robinhood’s new fund, that remains uncertain. Robinhood, currently in a quiet period, has chosen not to provide comments.