No Priors: Artificial Intelligence | Technology | Startups
00:41:59 · Vlad Tenev
[00:41:59] S0: Even though I try doing that sometimes, like we do have our IPO, I mean we're an underwriter, we're active in that pipeline, but individual investors should benefit from private companies and be a huge shareholder. That's really the vision behind Robinhood Ventures. How can we make it so that it's an anomaly to not have individual retail investors as a big constituent of your seed and series A cap table? So they should actually be at the earliest possible stage. And so Robinhood Ventures Fund One, we actually have an innovative structure for this. You can kind of think of it as a publicly traded venture capital firm. And so what we did was we used our IPO channel, which were the largest retail channel for IPOs, and we use that to raise capital in an IPO from Robinhood customers, individual retail, and then we use that to invest in startups. And then the funds are publicly traded on the New York Stock Exchange, so they trade just like a stock. And so Robinhood Ventures Fund one was late stage privates. OpenAI is in that fund, you have a couple of other companies, fintechs, a lot of AI companies, 11, Crusoe we recently announced. So that was ultra late stage, and then we asked ourselves, well, can we actually go to the extreme and give people exposure to seed in series A? And that's where Robinhood Ventures Fund II, the idea came to partner with YC and use a structure to give people exposure to the earliest possible stage where the risk is highest but the opportunity is also greatest, and that's the fund that Rich Aberman is running for us. And then we have tokenization of privates, which solves that problem in a different way, but right now for outside of The US. And the North Star is can we get a private company to be real time tradable 20 fourseven in fractional quantities just like a stock or a crypto? You should be able to just trade anthropic 20 fourseven in low dollar amounts with like some degree of high quality ownership, at least as good as owning LP interest in an SPB, right? And that should be available to everyone. So that requires pushing on a bunch of things in The US, accredited investor rules being one of them, but, yeah, we're highly motivated to lead that and make that happen.
00:44:38 · Sarah Guo, Vlad Tenev
[00:44:38] S1: That was my question for you, which is, you know, if you are, for example, a venture capitalist with a portfolio you think is going to make money in privates, then, you know, some people will have a choice of LPs. There's institutions. There's your friends you can make money for. Obviously, there are rules around, you know, QP and accreditation, around taking retail interest. Your view is clearly like some of those rules need to be updated. [00:45:06] S0: Yeah, you know, and there was an initiative by the SEC, it was announced last week, to allow a separate path. So they directed FINRA, which is the primary broker dealer regulator, to create an exam, an accreditation exam, where you can go as an individual and get accredited by taking a two hour exam at a testing facility. [00:45:33] S1: Versus it being asset based. [00:45:35] S0: Versus it being asset based, or there's also, you can be affiliated, you can have a Series seven, which is an affiliation with a financial firm licensure. But yeah, so it's a knowledge based exam, and I think it's definitely a positive step. I think they're doing stuff, but yeah, I think the goal would be to make it lower friction, because how many people are gonna go and sit for an exam at a testing facility? So I think more work needs to be done, and we're gonna be at the forefront of continuing to push for that. [00:46:07] S1: I think the main argument against such, you know, evolution of rules would be some sense of like, you know, protection against fraud and paternalism there. How do you think about that?
00:46:07 · Sarah Guo, Vlad Tenev
[00:46:07] S1: I think the main argument against such, you know, evolution of rules would be some sense of like, you know, protection against fraud and paternalism there. How do you think about that? [00:46:18] S0: For our customers, you know, we spend a lot of time talking to them, figuring out what they care about, and one of the things they care about most that they agree with is the statement that I should be in charge of my money, and nobody should tell me how to spend or invest my money. When we say to our customers, do you agree with this? I mean, it's overwhelming agreement. So not to say that they'll personally wanna do every type of risky speculative investment, but they don't think that it's the government's place or anyone's place to tell them what to do with their money broadly. Now of course, I think that people should be absolutely clear on what these products are, and so we should make sure to tell you what it is, give you as much information as possible. But I think about this, am I gonna tell you not to invest in the hot IPO? IPOs are risky, for sure. Meme coins even. Meme coins have like perfect regulatory clarity. If you wanna buy a meme coin, you are free to do so, and the SEC even wrote a letter saying these are not securities, they're collectibles, you know, it's clear clear the way. So I it's silly to, from a couple of different angles, not the least of which is, you know, meme coins are completely fine in any amount, but private companies... [00:47:48] S1: Is not rational from a just like pure risk orientation to restrict private companies.
00:47:48 · Sarah Guo, Vlad Tenev
[00:47:48] S1: Is not rational from a just like pure risk orientation to restrict private companies. [00:47:53] S0: Yeah, think that's right. And people are smart, right? I think that, I mean, there should be some sensible regulation. I'm in favor of that, but I think that we've just gone too far and the conditions that made the accredited investor rule necessary no longer hold. Mean I these rules are from a time before the internet. You couldn't even get any information. And now there's just an influx of information about everything, particularly private companies and AI models that can just scour and synthesize it for you. So, yeah, I think it makes a little bit less sense now. [00:48:35] S1: Can you talk about what Robinhood is doing to support Trump accounts?
00:48:35 · Sarah Guo, Vlad Tenev
[00:48:35] S1: Can you talk about what Robinhood is doing to support Trump accounts? [00:48:38] S0: Yeah, so this was like our way of serving our country, which we're very proud of. So Robinhood was selected as the sole initial trustee and broker for the Trump accounts, and we're working with BNY, which is America's oldest and most storied bank, and with Treasury and IRS to make this program happen. And yeah, the idea behind it is can we get every child from birth to own a chunk of The US economy through the S and P 500, through a low cost diversified ETF, and for every newborn child, so everyone born in January 2025 onward for the next three years, they get $1,000 ceded by Treasury. And Michael and Susan Dell, through their foundation, added another over 6,000,000,000 to children in lower income zip codes. And a bunch of other people are following, like Gwynne Shotwell committed a donation in SpaceX shares. Brad Gerstner, is the brains and the architect behind the program, he pushed it forward and also made a really big donation to the citizens of Indiana and their children. And so we're kind of powering the infrastructure, building the app, and we love it because I think it's the best thing for actually getting household stock ownership from 65% to 95%. So when it's successful, I think it'll lead to a much more stable and prosperous society in many decades. Our goal is to make this like the best product the government's ever launched, and the most enduring positive aspect of President Trump's legacy. That's our goal.
00:50:44 · Sarah Guo, Vlad Tenev
[00:50:44] S1: It's an amazing effort. Sign your kids up. So, last question for you. Andrew Reid, who we both know well, described you as a strange combination of, like, unlimited IQ and the steadiest possible hand when working with, you know, the vagaries of the financial markets and PR and large user bases. [00:51:05] S0: Yeah. [00:51:06] S1: How do you keep your level headedness or cool or what advice do you have for the many business leaders that listen? [00:51:13] S0: I think going through a lot of challenges as a child just made me very used to going through challenges, right? And you know, I had a very supportive and amazing family, great parents, but we were kind of in this together, right? We kind of all immigrated to The US at the same time, and I wasn't like a child that was given things, right? It was almost like you're a member of this family, and we all kind of have to figure this out. I had my part, they had their parts. So it was obviously their child, but kind of treated with a lot of autonomy, almost as an equal from a very young age. And we run through a lot of, we come across a lot of business challenges at Robinhood, at Harmonic, at all these things, but you know, when you step back and say, alright, well, does it compare to the threat of deportation? What about, you know, and we talk about inflation here of 5% and freak out about it. What about the 2000% inflation that we went through as children? So, you know, sometimes I think about that with my own kids, right? [00:52:33] S1: Do you create challenge for them?