Well, it's not like you guys started Robinhood and Sequoia or Kleiner Perkins gave you a $100 million check.
No, because you guys were really unproven at that point.
So, you guys were actually getting angel investments, 50K, 100K. What was like the lowest angel investment you got during that time?
I think we probably took some. I mean, we took money from all comers, right? Back then, there was this site called AngelList where anyone could sign up, and you know, we signed up as a startup, but you could sign up as an individual.
And Robinhood was available at a $10 million valuation cap. So essentially, you could get into Robinhood at an effective price of 10 million.
A million dollars, you could have bought 10% of Robinhood right then and there.
And we probably would have taken it, right? And so we pitched, we pitched you, we pitched individual normal people, like people from Iowa in the middle of the country, maybe made a little bit of money and were investing in startups, the same exact way that we would pitch Sequoia or Kleiner or Andreessen Horowitz, which ended up investing in that first seed round. But yeah, we had people, normal people, who put in 100K at a 10 million valuation cap, and you know, back then we really needed every dollar that we could raise. So if you were in, you were in. We took all comers, basically.
Well, right now at this very moment, Robinhood has a market cap of $103 billion today based on the current stock price. How many of those angel investors during that little, you know, that little 100K, 50K roundup are still invested today? You know, they still own those shares.
I don't know if they own 100% of it, but during some of our darker times, say in 2022 when the stock was trading below the cash that we had on our balance sheet, I would get emails from some of those folks and they would tell me, 'Hey, you know, just want to let you know public markets haven't been kind to you, but I haven't sold a single share and I've been holding since that first seed round and I'll continue to hold.' And so I think there are probably some of those people that made nine figures just off of their initial Robinhood investment.
Yeah. But to everyone who's watching, 99% of the companies that were on that list probably went out of business and made people zero.
Yeah. That's angel investing is super, super risky.
Well, let me tell you, because I've looked into this. We have another product, another business line called Robinhood Ventures, and we recently IPO'd. So the way to think about Robinhood Ventures is it's almost like a publicly traded venture capital firm. So you know, the venture capital firms like Sequoia, Kleiner, the big ones that seed all of these technology companies, they're privately and closely held.
So we asked ourselves, could we actually invert this and create one of these firms but take it public so that the first capital in these firms isn't from, you know, large institutions from the shareholders, but it's from individuals on the Robinhood platform. So we built this product a couple years ago called IPO Access that allowed us to participate in other IPOs, and then for Robinhood Ventures, and we've got two funds so far, RV1 and RV2, we actually ran those through our platform and the vast majority of the capital raised in the IPO was from Robinhood customers. And then we take those funds and we invest them in startups. So Robinhood Ventures Fund One was kind of frontier large technology companies, OpenAI, Stripe, for example. Robinhood Ventures Fund Two, we partnered with Y Combinator, and that fund's thesis is seed and Series A stage, so companies with an average valuation in the low tens of millions, much, much smaller. And what we found was that there was a PitchBook study about this. If you look at early stage investing as an asset class, broad and diversified, the returns and the appreciation potential from investing in seed companies is larger than companies at any other stage, even accounting for a higher rate of company failures. So more of those will go to zero. But if you invest in a basket of them, historically what's been found is that's been the highest performing asset class out of all stages of venture.
Yeah, I invested in Project Prometheus, which is Jeff Bezos's new AI company.
But in order to do that, I had to meet the right person who had a relationship with situations like this. I had to show a high net worth and the minimum was $200,000. So, I put $200,000 into Project Prometheus. It's an early stage startup.
