How Ordinary People Can Invest in SpaceX and OpenAI with Zero Barriers

Core Background: Wealth Creation Is Shifting from Public to Private Markets

A major paradigm shift is occurring in financial markets. In the past, ordinary investors could share in corporate growth by purchasing newly listed stocks like Amazon or Google. But today, giants like SpaceX choose to remain private even at valuations of hundreds of billions of dollars, and AI leaders like OpenAI are doing the same.

This means a harsh reality: if ordinary investors cannot access private markets, they will be completely excluded from the greatest innovation dividends of this generation.

ARK Invest CEO Cathie Wood (known as "Mama Wood" in Chinese investment circles) recently had an in-depth conversation with Robinhood CFO Jason Warnick, exploring how financial tool innovation can break through the institutional barrier of "accredited investor" requirements to achieve true investment democratization.

Institutional Asymmetry: How an Outdated "Protection" Mechanism Blocks Retail Investors

The Fundamental Problem with Accredited Investor Thresholds

Current U.S. law defines an "Accredited Investor" as someone with a net worth exceeding $1 million or annual income above $250,000. This standard is essentially based on an outdated assumption — that wealth equals sophistication, and that lack of wealth means needing protection.

This system originated from the U.S. Securities Act of 1933 and SEC's Regulation D issued in 1982, designed in the aftermath of the Great Depression to protect ordinary citizens lacking financial knowledge from high-risk investments. The logic at the time was: people with certain wealth are more likely to have the ability to evaluate complex investment products, and even if they lose money, it won't affect their basic livelihood. However, this standard has barely been adjusted for inflation since 1982 — if adjusted, the $1 million threshold from that era should exceed $3 million today. Although the SEC in 2020 expanded the definition to include holders of specific financial licenses, the overall framework still uses wealth rather than knowledge as its core criterion.

Yet in today's information age, the spread of knowledge has long broken through wealth barriers. Many retail investors, through deep product experience and independent research, understand innovative companies like Tesla even better than some institutional analysts who only stare at benchmark indices. This "protection mechanism" actually deprives ordinary investors of the opportunity to participate in the largest value creation in human history.

Public Markets Shrinking, Private Markets Expanding

The data is striking: the current number of U.S. listed companies is only half of what it was 30 years ago. Due to the bureaucracy of listing regulations and excessive focus on short-term performance, top innovative companies choose to stay in private markets longer.

Multiple structural factors drive this trend. The Sarbanes-Oxley Act (SOX Act) of 2002 dramatically increased compliance costs for public companies — annual audits and internal control reports alone can cost millions of dollars. Meanwhile, capital supply in private markets has surged dramatically — global private equity assets under management now exceed $8 trillion, allowing companies to obtain sufficient financing without going public. Post-IPO quarterly earnings pressure and intervention from activist investors make innovation-driven companies requiring long-term R&D investment prefer to remain private. Additionally, M&A activity continues to reduce the number of public companies, as large corporations take listed companies private through acquisitions.

This creates a massive value gap — when a company finally goes public, it has often already completed its explosive growth from 1 to 100, leaving secondary market investors only with buying at the top and slow subsequent growth.

Two Innovative Fund Structures: Practical Paths for Retail Investors to Access Private Markets

Interval Fund: ARK's ARKVX

Cathie Wood introduced ARK's interval fund ARKVX, with the following core design logic:

• Asset Allocation: Approximately 80% public market assets + 20% private assets, balancing liquidity
• Subscription Mechanism: Daily inflows allowed
• Redemption Mechanism: Outflows only permitted quarterly, typically limited to around 5% of net asset value
• Entry Threshold: No accredited investor status required

An interval fund is a variant of closed-end funds registered under the U.S. Investment Company Act of 1940, regulated by the SEC. Unlike traditional closed-end funds, interval funds are not listed on exchanges but instead issue and redeem shares directly to investors at net asset value (NAV). The core innovation lies in the "interval redemption" mechanism: the fund pre-sets redemption windows in its prospectus (typically quarterly), with each redemption generally limited to 5%-25% of the fund's net assets. If redemption requests exceed the limit, they are allocated proportionally. This structure allows fund managers to allocate a significant portion of assets to less liquid private equity without worrying about sudden large-scale redemptions forcing fire sales of underlying assets.

This mandatory liquidity restriction precisely matches the long-term horizon required for private investments, avoiding the impact of short-term redemption pressure on underlying assets.

Closed-End Fund: Robinhood's RV1

Robinhood's RV1 fund takes a different approach:

• Trading Method: Listed on NYSE, providing daily liquidity
• Entry Threshold: No accredited investor status required
• Investment Targets: Top private companies like SpaceX, OpenAI
• Potential Risk: May trade at a discount or premium

Once listed on an exchange, a closed-end fund's market price is determined by supply and demand, often deviating from the fund's per-share net asset value (NAV). When the market price is below NAV, it's called "trading at a discount"; when above NAV, it's "trading at a premium." Historical data shows that most closed-end funds trade at a long-term discount, with an average discount rate of about 5%-10%. However, closed-end funds investing in hot targets (such as today's top AI companies) may trade at significant premiums, meaning investors are effectively paying more than the book value for the underlying assets. Investors need to understand that even if underlying assets perform well, changes in the discount/premium themselves will affect investment returns.

It provides retail investors with the convenience of participating in private equity as easily as buying and selling stocks. Although prices may deviate from NAV, it dramatically lowers the barrier to entry.

The True Profile of Retail Investors: A Misunderstood Rational Force

Data Overturns Bias

Retail investors have long been labeled as "chasing highs and selling lows." But Robinhood's underlying data reveals a completely different profile:

• Average Age: Around 36 years old — the backbone of society
• Investment Behavior: Primarily buy-and-hold, not frequent trading
• Market Role: Acting as a buffer during crashes, not an amplifier

The most surprising finding: when institutions exit due to forced liquidation from risk control models or momentum chasing, retail investors choose to buy the dip based on fundamental trust in the product. This "buy the dip" behavior actually provides a value floor for the market.

This phenomenon forms an interesting contrast with the "disposition effect" in behavioral finance. Traditional theory suggests retail investors tend to sell winning positions too early and hold losing positions too long, but the new generation of digitally native investors seems to exhibit different behavioral patterns — they tend to make decisions based on judgments about a company's long-term value rather than short-term price fluctuations.

Rocket Logic VS Financial Statement Logic

Cathie Wood used Tesla as an example to illustrate a profound point: institutional investors are often trapped by current production data and financial statements, while ignoring the technological depth and leadership quality behind the company.

Retail investors can look beyond the numbers to see a grander narrative — such as how Musk's technical prowess in launching rockets translates into a dimensional advantage in car manufacturing. This technological optimism isn't blind; it's a deep understanding of innovation patterns. This touches on an important valuation methodology divide: traditional institutions rely on DCF (Discounted Cash Flow) models and comparable company analysis, which often severely underestimate the potential of disruptive innovative companies because they cannot quantify the nonlinear growth from technological breakthroughs. While retail investors may lack precise financial modeling capabilities, their firsthand experience as product users can sometimes capture value signals not yet reflected in financial statements.

The Innovation Super Cycle: A Historic Opportunity for Early Participation

The core consensus reached by both speakers is that current innovations — artificial intelligence, robotics, blockchain, multi-omics technology — are at the starting point of an ultra-long cycle.

Multi-omics refers to research methods that simultaneously integrate data from multiple biomolecular levels including genomics, transcriptomics, proteomics, and metabolomics. With the exponential decline in sequencing costs (human genome sequencing costs have dropped from $3 billion in 2003 to under $200 today) and AI applications in bioinformatics, multi-omics is revolutionizing drug development, precision medicine, and agricultural biotechnology. ARK Invest considers it one of five major innovation platforms alongside AI, projecting the related market to reach trillions of dollars by 2030. Many frontier companies in this field — such as those engaged in AI-driven drug discovery — are still in the private stage, precisely the territory that retail investors need new investment tools to access.

Through private equity funds, retail investors aren't just buying a stock — they're casting a vote for a future not yet perceived by the masses. This early participation allows ordinary people to enjoy the richest portion of profits from obscurity to industry giant, just like top venture capital firms.

For company founders, they are also beginning to realize that retail investors are not just a source of capital, but advocates of brand loyalty and product evangelists — a unique value that institutional investors cannot provide.

A Rational Perspective: Risks and Considerations of Private Market Investing

Despite the exciting trend of financial democratization, investors must remain clear-headed:

1. Liquidity Risk: Private assets have long monetization cycles, and interval fund redemption restrictions mean capital may be locked up. Typical venture capital fund lock-up periods are 7-10 years; even when participating through interval funds or closed-end funds, investors need to be prepared for long-term capital commitment
2. Valuation Opacity: Private companies lack the price discovery mechanism of public markets, and valuations may be biased. Private company valuations are typically based on the most recent funding round price, but this price may come with various preference terms (such as liquidation preferences, anti-dilution protections, etc.), making the actual value of common shares lower than the nominal valuation
3. Concentration Risk: Over-betting on a few star private companies can bring enormous volatility. History has no shortage of cases where companies valued at tens of billions ultimately shrank dramatically or went to zero (e.g., WeWork's collapse from a $47 billion valuation)
4. Fee Structure: Management fees for such innovative funds are typically higher than ordinary ETFs. Interval fund annual management fees usually range from 1.5%-2.5%, far higher than passive ETFs' 0.03%-0.2%; under long-term compounding effects, fee differences will significantly erode returns

Democratization of investing does not equal simplification of investing. While embracing new tools, maintaining a long-term perspective, diversified allocation, and deep research remain the unchanging foundational principles.

Conclusion

We are in an innovation super cycle where the physical and digital worlds are deeply converging. Institutional shackles are being broken. Through tools like interval funds or closed-end funds, even without a million-dollar net worth, ordinary people can participate in the technological progress that is changing the world.

The future of investing will no longer be a privilege game for the elite few, but a journey of value discovery with universal participation. Maintaining curiosity, adhering to long-term thinking, and embracing fundamental research will be the keys for every ordinary person to achieve wealth breakthroughs.