The red Lotus Esprit slips past the security gate, leaving behind the large, Spanish-style house and its sumptuous backyard pool. Vlad Tenev smiles as he grips the wooden-sphere stick shift and nudges the sports car into higher gear. Soon, the car is lapping up the oak-shaded curves of a Los Altos Hills back road as it winds toward the heart of Silicon Valley.

The 1987 Lotus is a striking vehicle, with couch-like leather seats barely off the ground, and mini cigarette lighters and ashtrays on each armrest. The car’s top speed is a modest 148 mph. It’s an unusual ride for a billionaire who could easily spring for a garage full of McLarens and Bentleys, but it clearly delights Tenev.

For the CEO of Robinhood, the Lotus is the fulfillment of a dream, held by many overgrown boys, of owning the car you drove in a childhood video game. It also embodies the values of unconventional design and rule-breaking that Tenev has sought to emulate at his company.

Cars can be a metaphor for going fast, achieving independence—or driving off a cliff. All of those feel appropriate for Tenev and the company he cofounded, which in barely a decade has worn very different identities, including feel-good startup and archvillain. Today, for the first time in a while, Robinhood’s road is smooth and wide open.

This article is a Fortune digital cover story for the August/September 2024 issue.

Love or hate Robinhood, there’s no denying it has, more than any other company in recent memory, changed the way Americans invest. It popularized rash mass purchases of stocks like GameStop and Dogecoin, but also spurred the broader brokerage industry to copy its no-cost, mobile-first approach. Robinhood has grown fast: It had 24.1 million funded accounts at the end of May, up from 12.5 million in 2020, and its assets under custody have bulged to $135 billion. And it has transformed the demographics of investing, helping millions of people get a piece of the stock market for the first time.

Robinhood has also changed Tenev. The 37-year-old first-generation American has weathered a series of crises, some self-inflicted, that Silicon Valley veterans say would have crushed most CEOs, emerging more canny and focused. Tenev is also just getting started. Not content for Robinhood to be a pretty, youth-focused stock-picking app, he is building a rival to Fidelity and Charles Schwab for the next half-century, aiming to serve a wider clientele while incorporating radical use of AI and blockchain technology. The Robinhood Tenev envisions will be a powerful personal-finance machine, designed for maturing users who are less and less likely to wipe out at high velocities.

The Lotus eases into a parking spot in a humdrum office park. Clad in jeans, a black T-shirt, and coral-colored sandals, with a friendship bracelet made by his young daughter around his wrist, Tenev heads into work. Cars are still on his mind as he leads Black Widow, the internal name for a cross-team strategy meeting. The subject: a wide-ranging platform redesign with the goal of making Robinhood feel, in Tenev’s words, “more serious.”

The team is discussing a new shade of yellow for one of the app’s screens, and Tenev is not quite satisfied. “I think it’s better. I just don’t think it’s iconic enough,” he says, before embarking on a short monologue about the Lamborghini Countach, a 1970s sports car that upended the auto-design world by replacing friendly bubble shapes with sharp fins and a streamlined body.

The discussion shifts to a technical issue as Tenev pushes the team to kill “the loader,” an icon that Robinhood and other sites display to tell users a page will appear momentarily. Some on the team balk at the idea, saying it’s not a viable option, but Tenev insists, with a friendly smile.

But mostly the meeting is about colors. There is an animated 10-minute discussion on shades of green. A new swatch of yellows brings coos of delight. The team briefly contemplates changing the familiar green-is-up and red-is-down scheme for stock prices—until someone points out the “cognitive load” that would come with challenging a learned behavior.

The fixation with color and design is deeply ingrained at Robinhood. Edward Tufte’s tome The Visual Display of Quantitative Information is an in-house bible. When asked what other companies they view as inspiration, executives don’t mention brokerage or banking firms: Tesla and Apple are Robinhood’s aesthetic North Stars.

Occupying Wall Street: Cofounders Vlad Tenev (right) and Baiju Bhatt at the New York Stock Exchange for Robinhood’s IPO in July 2021.

The design obsession came from Tenev’s cofounder, Baiju Bhatt, who stepped down as co-CEO in 2020 and left the company in March to work on a soon-to-be-announced space startup. Still sporting a bushy black mane that falls past his shoulders—Tenev has cut his own formerly flowing hair into a short, floppy mop—Bhatt is described by everyone in his orbit as a product genius. He is also far more emotive than Tenev, who is laconic to an almost inhuman degree.

“One of the high-water marks of product design is when you see something and use it for the first time and get a sense of who was behind it,” says Bhatt, citing Apple as the paragon. “I say that to differentiate from products that feel like they’re designed by committee.”

Unlike other design-focused firms, though, Robinhood’s objective is not to encourage a customer to buy a vehicle or a tablet but to induce a type of behavior: trading stocks. Like other app makers, Robinhood strives to ensure that every screen and every tap deliver a small spike of pleasure.

All of this has made stock trading fast, easy, and pleasant like never before. But it has also resulted in Robinhood and its founders, at times, becoming objects of widespread distrust and even hatred.

A 4 a.m. phone call rarely brings happy news, and the one on Jan. 28, 2021, was no exception. The Robinhood team had tried to reach Tenev, but amid a spate of 20-hour days, his digital-hygiene regime involved his sleeping in one room with his phone in another. It was his wife, Celina, who got the call and woke her CEO husband.

It was bad: A securities regulator had informed Robinhood it had to post $3 billion in collateral—that day—or else the company could be forced to shut down all trading.

The demand was a black-swan event born of the depths of the pandemic when people, along with watching Tiger King and hoarding toilet paper, took to trading stocks in once-unimaginable volumes. These included legions of first-timers who poured billions into so-called meme stocks like GameStop and AMC. For most, Robinhood was the go-to platform.

The problem: While the convenience of buying stock had improved dramatically by 2021, the country’s financial plumbing had not. It still took 48 hours for a trade to clear, and brokerages had to serve as a backstop, ponying up cash while transactions worked their way through creaky clearinghouses. On most days, this wasn’t a problem. But owing to a particularly feverish bout of meme-stock buying on Wednesday, Jan. 27, the regulator wanted $3 billion.

The size of the request was stunning. So, too, was Robinhood’s response. By 4:30 a.m., Tenev had dragged out of bed his mentor Micky Malka, a venture capitalist famous for his fintech connections. Malka, Tenev, and other senior executives worked the phones incessantly to raise money, assuring investors that while Robinhood was facing a crisis, its underlying business was sound. Meanwhile, Robinhood barred customers from buying GameStop and a dozen other meme stocks, which reduced the amount of collateral it had to post.

The blitz paid off. In an unprecedented feat, Robinhood scraped together over $1 billion that fateful Thursday, and by the weekend had over $3.4 billion of fresh capital in its coffers—from investors who included Malka’s Ribbit Capital, Sequoia, and Andreessen Horowitz.

The success was the product of foresight. In 2020, after a calamitous 26-hour outage, Malka and Tenev had drafted a break-glass playbook for emergencies that might force the company to raise money in a hurry. According to Malka, the plan was modeled on a memorable episode from the 2008 financial crisis, when Goldman Sachs and Bank of America issued convertible notes to Warren Buffett in return for emergency cash.

Still, this master class in nimbleness took a toll on the company—and on the public image of its founders. In the space of months, popular perception of Tenev and Bhatt shifted from likable entrepreneurs to the epitome of self-serving tech-bro douchebags. A faction of critics already reviled them for peddling risky trading strategies—particularly options—to novices. Now, after the collateral call—and the suspension of trading that went with it—social media blazed with conspiracy theories that accused Tenev of colluding with hedge fund kings like Citadel’s Ken Griffin to sabotage GameStop and protect short-sellers.

There is no evidence such a thing occurred, but the conspiracy became an article of faith on Reddit and in the internet’s fever swamps. Online mobs targeted Robinhood execs with abuse, joined by smaller actual mobs who, on at least one occasion, struck the window of the company’s offices with a bag of feces.

The experience was frightening. As death threats mounted, the Tenevs fled their home, hiding out in a hotel and hiring a security detail. The situation proved especially traumatic for the more sensitive Bhatt, according to two Robinhood colleagues who recall his almost total physical and emotional withdrawal. Bhatt downplays that characterization, noting that he had already stepped down as co-CEO and was focusing on his newborn baby.

Scott Sandell, chairman of venture capital firm NEA, recalls the events as an ordeal beyond what most corporate leaders ever face. “It was an extraordinary degree of pressure that I would posit very few can handle—many standard deviations of pressure from the mean, aside from a war zone. Vlad was able to handle it. It wasn’t good for Baiju, and it’s not good for most people.”

Vitriol toward the founders even made its way to Hollywood. The 2023 film Dumb Money depicts retail investors prevailing in a David-and-Goliath battle against hedge fund billionaires—villains who are in cahoots with the Robinhood founders. One scene depicts a wasted Tenev (played by Sebastian Stan) partying at an all-night rager with celebrity Robinhood customers, and boorishly hitting on a woman he mistakenly believes is flirting with him.

The movie does a decent job capturing the broad strokes of the meme-stock mania; its depiction of Tenev is off the mark. He stopped drinking in 2017 in a gesture of solidarity with Celina, a fellow Stanford grad who had her own medical startup, as they awaited the birth of the first of their three children. Today, the couple’s favorite indulgence is fancy coffee, and Tenev, far from being a bottles-and-models type, finds delight in chess, math problems, and his kids.

Still, other elements of Dumb Money ring true, including a scene where Tenev glibly describes the founders’ immigrant backgrounds to a journalist. The broad strokes of that backstory are accurate. Bhatt was born in Kansas and raised in Alabama and Virginia, the child of Indian parents; Tenev arrived in Delaware as a 5-year-old from Bulgaria, where his economist father had cajoled university librarians into lending books not authored by Marxists.

Still, one former Robinhood executive feels the founders, whose affect is every inch American, trot out their immigrant past a little too frequently. The executive claims the tale is part of a broader, self-serving founding myth—one in which Robinhood is an outgrowth of Occupy Wall Street, the socialist-style protest movement that arose in response to the 2009 financial crisis. “It was part of a narrative they concocted to add legitimacy to what was a brilliant business idea,” says the source, adding that the founders dreamed up the Occupy angle with the help of VCs who told them their startup needed a story.

The company disputes this interpretation. Regardless, there’s little in the record to suggest the founders have ever been anything other than rabid capitalists. This is especially true of Bhatt, who, according to a recent book, liked to park his Porsche where he could look at it from his office window. Proxy filings show that Tenev and Bhatt hold roughly equal stakes that total 14% of Robinhood, worth around $2.7 billion as of mid-July.

Malka, the VC, says he and Tenev bought tickets to see Dumb Money but changed their minds before showtime. As for Bhatt, he expresses indifference to how he and Robinhood are portrayed in the media. He does, though, grow animated about one element of the movie. “I heard the dude that played me is wearing a wig. And this is all natural,” he exclaims, tugging a fistful of his flowing mane. “Let the people know: This is not a wig.”

Even after the angriest opprobrium faded, Robinhood’s handling of the January 2021 crisis generated fodder for populist critics. As it turned out, Robinhood’s ultrafast response meant that the company needed only $1 billion to satisfy the regulator—but it raised an additional $2.4 billion anyway, in the spirit of letting no crisis go to waste. The extra fundraising provided insiders an opportunity to buy pre-IPO Robinhood stock at a 30% discount.

This might have been fine if the IPO, in July 2021, had gone well. Instead, HOOD stock debuted at $38, promptly fell 10% on opening day—and bottomed out at $6.81 a year later. This came as an especially bitter pill for the many Robinhood customers who bought shares at the open.

For Tenev, the period was a bleak one. In addition to contempt from analysts and former fans, Tenev had to endure another indignity from crypto grifter Sam Bankman-Fried, who bought 7% of Robinhood’s shares in early 2022 and let it be known he wanted to shake up the company.

Reluctantly, Tenev invited Bankman-Fried to his home. The pair sat in the backyard, where the FTX founder laid out his plans. “He was very formal about it, surprisingly,” Tenev recalls. “And he was just like, ‘Well, there’s things that we could do together, you know, derivatives, European trading—can you integrate Alameda as a counterparty?’ ” (Alameda was the personal hedge fund Bankman-Fried used to loot FTX customer money.)

Tenev demurred, and the discussions petered out. Following Bankman-Fried’s arrest in late 2022, Robinhood reacquired his shares; Bankman-Fried is currently serving a 25-year fraud sentence.

This period also coincided with a series of putrid earnings results and layoffs, leaving Tenev in a state he had not felt since starting the company: unhappy. Ever the pragmatist, he responded by making a list of steps to turn Robinhood around, including cleaning house of “mercenary” employees whose motive for joining had been to get a piece of the IPO.

The process also included a brutal ritual of self-criticism, in the form of quarterly meetings that envisioned Tenev getting fired by the board. “Say they brought in a really, really good CEO—like, the archetype of the best CEO on the planet,” Tenev recalls. The team imagined that CEO saying: “Let’s just, like, redo everything that asshole before me did, and clean up the mess. It’s a useful exercise.”

Needless to say, Tenev wasn’t ousted. (Together, he and Bhatt hold more than 60% of Robinhood’s voting shares.) And the company has gradually pulled itself out of the doldrums. Robinhood was profitable for the 12 months through March 31—a new milestone. And its share price, while still far off its IPO peak, has more than trebled from its $7 low point.

Still, Tenev’s work is far from finished, and he faces two major challenges: He must persuade investors that Robinhood can grow into a big-league operation, and he must convince the public that he and his company are more than the shallow caricatures reflected in Dumb Money.

It was little more than a generation ago that stock traders were overwhelmingly middle- and upper-class men who paid $10 or $20 to make trades by phone with their brokers. The internet began to change that, as platforms like E*Trade lowered the financial and cultural barriers to buying stock. Still, it took Robinhood to throw the doors wide open. The company introduced no-commission trading in 2013, eventually forcing the industry to follow suit, thanks to an app that eschewed the industry’s middle-aged-white-guy vibe.

The U.S. stock market is the biggest generator of wealth in history, and it matters a lot that Robinhood has helped millions of once-excluded Americans get a piece of it. Robinhood says the median age of its customers is 34, compared to 58 for industry incumbents, and that its user base is far more diverse. A recent survey paid for by Robinhood found that Black and Hispanic customers respectively accounted for 4% and 8% of incumbent brokerages’ users; for Robinhood, those numbers were 14% and 16%. Meanwhile, the company has tailored offerings to customer segments long ignored by the industry. For instance, Robinhood offers a 1% to 3% IRA match to workers at some gig economy companies, including TaskRabbit and Grubhub.

30%

Share of customers at Robinhood who identify as Black or Hispanic, 2024. (Industry average: 12%)

32%

Share of customers at Robinhood who identify as female, 2024. (Industry average: 42%) Sources: Robinhood, Dynata

“Most families first access the stock market when a family member receives stocks as part of employment compensation, and historically that didn’t include women or people of color,” says Sergio Ricci, who has authored a paper with fellow law professor Christina Sautter that argues services like Robinhood lower barriers to amassing wealth.

There is no guarantee, of course, that entering the market will pay off, as demonstrated by the many first-time investors who lost big—often while using Robinhood—in recent meme-stock and crypto-token bubbles. Critically, though, there’s evidence that those traders are hardly the majority. Studies by Vanda Research, which focuses on retail investors’ behavior, have found that among those novices who’ve stuck around, acumen has improved over time. Since early 2021, these investors have been less inclined to chase meme-lord trends, and more likely to opt for more stable big-name stocks or index funds. “By losing capital, a lot of retail investors learned a lesson,” says Vanda VP Marco Iachini.

The upshot is that a large cohort of young investors appear committed to the long haul—and many millions of them are Robinhood’s customers. The question is whether Tenev and his team can build a business around them that could rival giants like Fidelity and Charles Schwab.

Chart shows price performances of selected investors' portfolios

There are substantial reasons for doubt. One is that the average Robinhood account balance has stubbornly remained stuck near $5,000. This reinforces a perception that many customers use Robinhood as a play account, keeping most of their money at more established firms—and that newer customers could do the same as they become more affluent.

Robinhood CFO Jason Warnick says he is keenly aware of the potential for flight, which he calls “graduation risk.” The company’s response has been to emulate Amazon—where Warnick worked for two decades—by adding layer after layer of offerings so customers don’t want to leave.

In the past 18 months, Robinhood has made big strides on this front, rolling out a retirement-account offering and its first credit card. In both cases, it offered major inducements to sign up: a 3% match on IRA transfers for members of Robinhood’s premium $5 per month Gold tier (and a 1% match for others) and credit card travel and rewards perks that rival industry leaders. Warnick says the incentives are designed to ensure that both products turn a profit, sooner rather than later.

All of this will help mitigate the historical weakness of Robinhood’s strategy: an overreliance on trading, which brings a bounty when the market is up but hard times when it cools. Robinhood generates much of its revenue by routing batches of transactions to market makers, a practice called payment for order flow, or PFOF. But when trading volumes decline, that spigot also dries up.

Charts show Robinhood's quarterly revenues and profits

Matt Harris, a fintech investor at Bain Capital Ventures, notes that there’s a significant gap between the “adrenaline-driven frequent trading strategies” in Robinhood’s DNA and the wealth-management model that drives revenue at a Fidelity or Schwab. The latter model is more lucrative but also entails fiduciary obligations to put customers’ financial interests first—which means more red tape and expense. Still, Harris doesn’t rule out Robinhood making the transition: “Sometimes the pirates become the navy,” he notes. He adds that the company has an ace up its sleeve: Unlike most financial companies, it owns its tech stack “soup to nuts,” making it less dependent on partners and better positioned to make profits.

Ultimately, though, Robinhood’s future rides with Tenev—now battle-tested and in his late thirties, the age when other famous entrepreneurs have hit their peak. Speaking with Tenev, one senses he has only begun to flex his ambitions. He believes that two technologies—crypto and AI—will reshape the financial world, and he is laying plans for both.

Robinhood recently bought one of Europe’s longest-established Bitcoin exchanges—a move that will expand its overseas reach and give it a beachhead to develop an institutional crypto business. More radically, Tenev predicts that blockchains and the conduits of traditional finance will become fused, enabling companies adept at both to become leaders.

As for artificial intelligence, Tenev—who recently led a funding round in a startup focused on improving AI’s math skills—sees a huge opportunity in wealth advising. Right now, he says, the business is bare-bones and overpriced for ordinary investors, while richer clients overpay for glorified concierge service. Tenev predicts his company will be on the vanguard of a world where customers get affordable wealth-management guidance from an AI advisor with deep knowledge of their financial lives, backed up by a human touch when necessary.

Pulling this off would make Robinhood not only a financial giant, but also a design and engineering pioneer. For Tenev, the founder who rhapsodizes over the paradigm-busting achievements of the Lotus and Countach, it would be the equivalent of popularizing the flying car. And it could make Tenev and Robinhood truly iconic.

A version of this article appears in the August/September 2024 issue of Fortune with the headline, “How big can Robinhood really get?”

How memestock mania forced CEO Vlad Tenev to reinvent Robinhood—and himself