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Table of Contents

• "I Don't Get It"

My name is Gerry Hays, Founder & CEO of Doriot® (pronounced “Doe-ree-oh”), named after French-born American U.S. General Georges Doriot, the father of Venture Capital. I’m also an author (First Time Founders’s Equity Bible), inventor (U.S. patents for ads on t-shirts, coat checking, and VentureStaking - pending), and 21-year professor of venture capital and entrepreneurial finance at Indiana University.

Democratize Venture is my platform to explore the venture markets and share the insights, strategies, and frameworks I bring into the classroom. It’s also a way for me to share principles of prosperity — because at the end of the day, venture is a pathway to prosperity.

"I Don't Get It"

One of my favorite movies growing up was Big, starring Tom Hanks. If you've never seen it, Hanks plays a 12-year-old kid who makes a wish at one of those old Zoltar fortune teller machines and wakes up as an adult. Through a series of unlikely events, he ends up working at a toy company because, unlike all of the executives around him, he still thinks like a kid.

There's one scene that has always stuck with me.

An executive is pitching his latest toy idea. It's a skyscraper...that transforms into a robot. He's talking about the market opportunity, the sales potential, and why it's going to be a huge hit. Tom Hanks meagerly raises his hand and says, "I don't get it."

The executive is confused.

"What don't you get?"

"I don't get it."

Now the executive starts getting irritated because, from his perspective, he's already explained everything. But Hanks isn't asking about the business. He's asking a much simpler question.

Why would any kid want to play with a robot that transforms into...a building?

I've thought about that scene a lot over the past couple of months.

I've been participating in Founder Institute's AI Accelerator in San Francisco, and for the better part of two months I've done almost nothing except work on one thing: explaining VentureStaking in three minutes.

If I'm being honest, I feel a little like that frustrated executive.

I've spent more than two years thinking about this model. We've piloted it, filed a patent around it, talked with regulators, and refined the mechanics over hundreds of conversations. When you've lived inside an idea for that long, it becomes obvious. At least it becomes obvious to you.

Then you pitch it.

"I don't get it."

At first, that feedback was hard to hear because my instinct was to think, What don't you get? I just spent three minutes explaining it.

But then I realized something.

Nobody was saying the idea was bad.

They were telling me they couldn't find a place for it.

As humans, we organize the world into mental maps because we have to. Every day we're bombarded with new ideas, products, companies, and information. If we evaluated everything from first principles, we'd never get anything done. So our brains create shortcuts.

We put things into buckets.

That's SaaS.

That's venture capital.

That's angel investing.

That's crowdfunding.

That's retail investing.

The buckets aren't right or wrong. They're simply how we reduce cognitive load.

The challenge with VentureStaking is that it doesn't fit neatly into any of those buckets. The first instinct is to ask, "So...is this venture capital?" And when I say, "Not really," the conversation slows down because now I'm asking someone to create a new bucket instead of putting my idea into one they already have.

That's a much harder ask than I appreciated.

I also think it's easy to overestimate how representative Silicon Valley is. There's a narrative that capital is everywhere, and in one sense that's true. There is an enormous amount of venture capital in the Valley.

But that doesn't mean it's available to everyone.

If a VC funds one company out of every hundred they meet, capital is still a problem for the other ninety-nine founders. Most entrepreneurs aren't choosing between term sheets. They're trying to get their first meeting, their first believer, their first chance to demonstrate traction. They're often caught in that frustrating loop where investors want traction before they'll invest, but traction is difficult to build without capital.

At the same time, there are millions of retail investors who would love to participate in venture investing in a meaningful way. They don't expect to become Sequoia. They simply want a seat at the table. Today, there really isn't a game they can win, even though there's billions of dollars of potential capital sitting on the sidelines.

That's the problem VentureStaking is trying to solve.

The funny thing is that this article isn't really about VentureStaking.

It's about storytelling.

Later in Big, Tom Hanks asks a simple question.

"Why does it have to be a building?"

Someone else says, "Yeah...what if it was a bug?"

Suddenly everyone in the room starts imagining a different toy. They aren't arguing anymore. They're collaborating. The executive, meanwhile, storms out because his ego is wrapped up in the original idea.

I've had a lot of "I don't get it" moments over the past two months, and if I'm honest, they've been some of the most valuable conversations I've had. Sometimes someone asks a question that exposes an assumption I've been making. Sometimes they suggest a better analogy. Sometimes they use a phrase that explains the model more clearly than I've been explaining it myself.

Each time that happens, the story gets a little better.

I'm not ready to share where we've landed because I think we're still refining it, but I can tell you this much: I walked into Founder Institute trying to explain a robot that transformed into a building.

I think I'm leaving with something much closer to a robot that transforms into a bug.

And I have a feeling it's going to be a lot more fun to play with.

Have a great weekend -g