Episode summary
How to Invest in Future Unicorn IPOs | Trillions
Trillions
· · 50 min · Hosts: Eric Balchunas, Joel Weber · Guests: Cathie Wood, Brett Winton, Charles Roberts
Summary
The episode focuses on how ARK’s Venture Fund gives investors access to late-stage private companies such as SpaceX, OpenAI, Anthropic and xAI without using the ETF wrapper. The hosts argue that an interval fund is the right structure because an ETF cannot hold enough illiquid assets, while this fund can stay roughly 80% private and still offer quarterly liquidity at NAV. They also say the vehicle is designed to democratize venture exposure for nonaccredited investors.
A big part of the discussion is how the fund sources and underwrites deals. The guests say ARK relies on the same research team that covers its public stocks, invests directly on cap table rather than through SPVs, and avoids indirect exposure that can involve layers of fees and weak information rights. They argue that direct ownership, close contact with management, and a separate pricing committee make the marks more disciplined than some private-market products.
They also discuss why the fund can keep holding winners after an IPO. The guests say that if a company like Kodiak or another portfolio name goes public, ARK can keep it in the fund or add it to ETFs if the conviction still holds. They frame the product as a bridge between venture capital and public markets, even if that means it has not yet benefited from the ETF halo.
Key takeaways
- The guests say ARK Venture Fund uses an interval fund because an ETF cannot hold the amount of illiquid private assets they want.
- The fund is described as roughly 80% private and 20% public, with quarterly redemptions up to 5% of NAV.
- The guests say they invest directly on cap table and avoid SPVs because SPVs add fees and can weaken information rights.
- They say the fund has no carry, charges a 2.75% fee, and had grown to 521 million in AUM with inflows of 10 to 20 million a week.
- The guests say IPOs are liquidity events, not automatic sell signals, because the fund can keep holding names like Kodiak if conviction remains high.
Notable quotes
“We do not do that because we do not want to be anywhere near you know this crossdealing controversy”
How the episode opens
Welcome to Trillions. I'm Joel Weber. — And I'm Eric Belchunis. — Eric, I'm really excited about today's episode, but you're probably even more excited about it. — Yeah, because I have been writing about this topic for like the past month heavily.
And would you want to tell us what that topic is? Ever since SpaceX became like, you know, potential IPO, biggest ever probably, there's been this really, uh, intense interest in, okay, which ETFs hold private companies. And there's one XOVR, which we've gone over several times, the public privates crossover, that has a little bit of SpaceX, almost like a little copper wire inside an air conditioning unit.
It gives the whole unit value. And all these people have flooded this ETF just to get a tiny little piece of SpaceX. And that really has shown me that there is intense interest to get private companies in the ETF rapper.
How much SpaceX does it hold?
It started at like 10%, but as more people came into the fund and the assets grew, the percentage shrunk to like it's like three. And so it's I don't think it's worth it at this point to buy that. So as I was researching other ETFs that had private companies, we only found three, but there's tons of mutual funds with private companies.
And probably the one that's the most full of like the coolest hot private companies is the ARC venture fund which is uh from ARC. It was launched in 2022 kind of you know right sort of on the back end of Arc Mania and this is got some of the it's got SpaceX it's got OpenAI Neurolink XAI you on and on and the waitings are high you know between 8% 7% 6% the problem is it's a mutual fund so it's interesting to me this fund is outperforming the S&P 500 by 45 percentage points so it's done it job But it's got 500 million in assets which isn't nothing but com you know XOVR has like 1.5 billion and it's got 3% SpaceX.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private market investing
- unicorn ipo pipeline
- interval fund mechanics
- private asset valuation
- etf structural constraints
Companies and tickers mentioned
- SpaceX
- OpenAI
- Anthropic
Watch the episode
Watch “How to Invest in Future Unicorn IPOs | Trillions” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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