Elon is passing the hat for X

Delivered February 21, 2025 @ 5:00pm ET

Table of Contents

• This Week’s Highlights in the Democratize Venture …

  • We have an Update!

• The #1 Power of Decrease

  • How Complaining Shrinks Your Potential

  • Why It’s Even Worse Than You Think

• Elon Musk Wants My Money — Should I Give It to Him …

  • A Quick Recap of X’s History

  • The Investment Offer

  • This doesn’t look like succcess

  • My Conclusion

• Kingscrowd dropping next week!

Happy Friday!

My name is Gerry Hays, and for lack of a better description, I’m the custodian and convener of Doriot, a movement to break open the gates of venture and expand opportunity beyond an elite few.

I’ve been in the game of venture as a founder, investor, researcher, inventor, author, game designer, and professor. I’ve built companies and developed a global venture portfolio entirely from the great state of Indiana, all while teaching over 6,000 undergraduates and MBAs at Indiana University, as well as in Croatia, Hong Kong, Slovenia, and Singapore.

Democratize Venture explores how we can create new, more inclusive systems based on what I believe is relevant and important today — and insights into the mental strategies behind wealth building, a core aspect of venture. Much of what I share stems from discussions I have in the classroom.

This Week’s Highlights in the Democratize Venture Space

We have an Update!

Since 2018, our mission has been clear: become a global leader in Venture Education. With Fantasy Startup(R), QAI, Deal Reports, and The Venture Game, we’re on track to bring venture learning to every high school and university in the coming decades — preparing the next generation to build, own, and invest. Education has and will always be the foundation of our company.

But, 2025 is the year to build on that foundation: introducing a venture system so intuitive, so powerful, that joining feels like a no-brainer. After years of floating around in the ether, it’s finally ready to emerge — rising like a Phoenix from the heart of the Midwest, not Silicon Valley.

On April 15, 2025, Doriot will reveal “an unheard-of approach to startup investing” and you’ll get to dive in, test it firsthand, and see the thesis in action.

Over the coming weeks, we’ll share pre-launch teasers as the Democratizing Venture newsletter evolves alongside Doriot’s next stage. Stay tuned! 🚀

The #1 Power of Decrease

“Gratitude is the law of increase, and complaint is the law of decrease”

If you’ve been a long-time subscriber, you know I spend a lot of time on the power of gratitude. It’s not just a feel-good concept — it’s the foundation of success and the mindset that fuels growth. Think about it: if we aren’t grateful for what we have, why would we expect to receive anything more?

In The Game of Life and How to Play It, Florence Scovel Shinn emphasizes gratitude’s power — but she also warns of its dangerous counterforce: complaining.

According to Webster’s, complaining is "the expression of dissatisfaction or annoyance about something." But Shinn puts it more bluntly: Complaining is the Law of Decrease. It contracts possibilities, drains energy, and locks us into the very problems we’re frustrated about.

How Complaining Shrinks Your Potential

🧠 It rewires your brain for negativity. Every time you complain, you strengthen neural pathways that make negativity your default. Instead of seeing opportunities, you train yourself to see problems.

🤮 It repels solutions. Complaints dwell on what’s wrong without moving toward what’s possible. Instead of asking, How do we fix this? you get stuck in Why is this happening to me? Progress stalls.

☠️ It lowers influence and trust. No one follows a chronic complainer. People gravitate toward those who take ownership, focus on solutions, and bring a mindset of growth — not blame.

😩 It shrinks your capacity to endure. Every founder, investor, and builder faces challenges. Complaining makes those challenges feel heavier.

Why It’s Even Worse Than You Think

This isn’t just mindset talk — the science backs it up.

• The average person complains 15 to 30 times a day — often without realizing it.

• Stanford University research shows habitual complaining can shrink the hippocampus, the part of the brain responsible for memory and problem-solving.

• Chronic complaining spikes cortisol, the stress hormone, leading to higher blood pressure, weaker immune function, and an increased risk of heart disease.

In short, every time we complain, we’re burning through our own power, draining mental capacity, and sabotaging our health — all for zero return. So, how do we stop this self-inflicted damage?

1) Catch yourself. Pay attention to your thoughts and what you verbalize. I once heard, the cruelest form of thought is talking. Don’t give voice to complaints — start catching the urge before it escapes your mouth.

2) Take action. If something is worth complaining about, it’s worth fixing. If it’s not fixable, let it go. Don’t waste energy.

3) Surround yourself with problem-solvers. Find people who push through obstacles, and you’ll start doing the same.

Gratitude expands. Complaining contracts. Choose expansion. 🚀

Elon Musk Wants My Money — Should I Give It to Him?

Last week, I discussed the risks of investing in pre-IPO companies. This week, coincidentally, I was offered the chance to invest in X’s first funding round since Elon Musk’s acquisition via a syndicate I’m part of.

All I can say is: Whoa. Where do I even begin?

A Quick Recap of X’s History

As most of you know, X was once Twitter — the digital Town Square, where anyone could add short commentary on world events.

Twitter launched in 2008 and became a favorite among Silicon Valley insiders. It played a major role during the Arab Spring, giving the world a raw, unfiltered view of protests in Tunisia. By 2016, it had become the political battleground where Donald Trump used it to help propel his campaign — just as Obama had leveraged Facebook in 2008.

As divisions in the U.S. deepened, Twitter faced increasing pressure to de-platform users accused of spreading "misinformation." But, of course, misinformation depends on which side you're on. This pressure, combined with Twitter’s ongoing financial struggles, ultimately led to Musk’s infamous $44 billion acquisition in 2022.

He tried to back out of the deal, but the Delaware courts forced him to go through with it. To make it happen, he sold Tesla shares and secured funding from Wall Street and Silicon Valley.

Then, Musk moved fast and broke things:

• 80% of Twitter’s workforce — over 6,000 employees — were let go.

• Twitter was rebranded to X.

• Advertisers pulled back, worried their ads would appear next to controversial content.

Today, X is EBITDA positive, but ad revenue is down 50% since Musk took over. At one point, Musk even told advertisers, in so many words, to go f* themselves.

The Investment Offer

Through the syndicate, I had the chance to conduct my own diligence on X’s new funding round. Here’s what stood out:

1. X is still valued at $44 billion — the same price Musk paid — despite losing 50% of ad revenue. Yes, X is now operationally profitable, but with $10 billion in debt and $1 billion in annual interest payments, most of its cash flow is likely going straight to the banks.

2. Where’s the growth story? X has been cut to the bone, meaning the remaining employees are essential to keeping the lights on. Musk’s vision is to turn X into the “everything app,” like China’s WeChat — particularly in payments but also booking rides and managing smart devices. But WeChat’s success in China came from leapfrogging credit cards straight to mobile payments. That’s not the case in the U.S. While X announced a deal with Visa, there’s no evidence in the diligence docs that this strategy is working. People already use Venmo, PayPal, Zelle, and soon, stablecoins.

3. No IPO plans in sight. Given X’s financials — 50% revenue loss, no proven growth strategy, and $44 billion valuation — a public offering seems unlikely. Investing now means locking up my capital for years.

4. To 3-4x my investment over 5-6 years, X would need to hit a $150 billion valuation. Given all of the above, what are the odds of success?

This doesn’t look like succcess

Let me get to the thing that bothers me more than anything about all of this.

Take away the personality of Musk — I don’t have feelings one way or the other. But if we’re calling out the truth, neither Tesla nor SpaceX would exist without the U.S. taxpayer. Billions in subsidies and contracts have been issued to Musk over the years, and yet he, not the taxpayers, owns a major controlling stake in those companies.

So, X is essentially the only company he’s running that cannot rely on the U.S. government. Or is it?

First, instead of attracting advertisers with a strong value proposition to bring them back, X is suing those who pulled their ad spend. Musk is using the U.S. Court System to force companies into spending money on X rather than winning them over with results.

And then I read that Interpublic, a major ad consortium, is being threatened: spend on X, or risk the Trump administration delaying or rejecting its merger with Omnicom.

My Conclusion

X lacks a clear, organic growth strategy — there’s no strong business model or market-driven reason for advertisers and users to flock back to the platform. Instead of earning revenue through value creation, X is trying to force growth through lawsuits, political pressure, and coercion (e.g., suing advertisers, leveraging government influence). Doesn’t feel like capitalism to me.

Kingscrowd dropping next week!

KingsCrowd, an online private market rating and analytics platform for equity crowdfunding research, is currently raising on StartEngine.

Next week, we’ll break down their latest offering and release our analysis. Every so often, we make a report free to access, and next week will be one of those times. Stay tuned!

Have a great weekend! -gerry ([email protected])