The new moat in venture investing

Delivered April 3, 2026 @ 5:00pm ET

Weather in Bloomington, IN - Partly Sunny, 26⁰ C / 78⁰ F. Good Friday.
Happy Easter this weekend.

Table of Contents

• The new moat in venture investing

  • It’s community and distribution.

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.

The new moat in venture investing

I was on a call with a prominent angel investor in a major Midwest city. It wasn’t the content of the conversation that stuck with me. It was the tone.

At one point, they said they were getting “very defensive.” Not because I was being aggressive, but because what I was suggesting didn’t match their lived experience.

And I get that. If you’ve made money in venture over the last 20 years, the playbook worked.

1. Find SaaS (software-as-a-service) companies.

2. Back strong teams.

3. Wait for traction.

4. Rinse and repeat.

But you can’t look at the past of venture and assume the future will behave the same way.

Because software is going to zero, you don’t need massive engineering teams. You don’t need to raise millions just to build something. The old advantages - technical complexity, capital to hire developers, time to ship - start to disappear.

So the question becomes, what’s the moat?

It’s not code. And, ultimately, I don’t believe its Agents (unless you’re operating on proprietary data that nobody else has). OpenAI, Anthropic, open source — it’s all converging. The gap closes. Capabilities spread. It’s like operating on rented land.

So what is it?

It’s community and distribution.

Who has real attention? Who has real human trust. Who can move people? That’s the game now. And the uncomfortable truth is you can’t buy that early.

Most venture investors - let’s just be honest - only invest in traction. I’d argue 98.5% of investors are not willing to join a founder at the starting line.

So who builds the community? Who creates the distribution? Who generates the early signal? The founder. Alone.

Or we change the game.

This is where the conversation turned.

I suggested something simple.

What’s more valuable?

Twenty $50K checks…

or 10,000 people with $100 each in the same deal — whether through an SPV today or equity tokens tomorrow?

That’s not just capital.

That’s distribution.
That’s community.
That’s signal.

And that’s where things got defensive.

Because in the traditional model, the value comes from the check writers. And that has been true. But I don’t believe we’re playing that same game anymore.

And before someone says it can’t work, the rules already exist. Through Regulation Crowdfunding, we can legally facilitate democratized venture rounds.

But, we still need a bridge to venture. A way for people to learn by participating. Where capital is deployed in small amounts up front, almost like an ante bet in poker. Where discovery comes before investing, and community is built before traction.

Not throwing money into a black hole of a cap table and hoping it works.

Something different. Collectively discover, confirm, then make the seed bet.

A system that actually feels winnable. Something that operates more like a prediction market, but not in the sense of I win, you lose. More like we’re early together, and we either get it right together or we don’t.

Because that changes behavior. People pay attention. They engage. They learn. And over time, they get better.

I’ve been teaching the younger generations for 22 years and they don’t just want returns. They want proximity. Proximity to opportunity, to innovation, to what’s next.

And whether people realize it or not, venture has always been about proximity.

Wealth follows innovation. And the only way to be in proximity to wealth is to be in proximity to innovation.

So what’s the missing layer in Venture that the “non-traditional” angel investors can fill?

It’s Discovery.

Traditional angels don’t fund discovery. They wait for sure bets (well as sure as a bet as possible).

But what if the next generation doesn’t? And what if there is a system that allows a new generation of investors to take 90% less risk up front but get rewarded over the Angel and Seed Investors that want to wait for the “sure thing”? Where “calculated risk-taking” is more valuable than check size?

That’s the moat. Being in proximity before the world sees opportunity.

We’ve put together a 21-day Discovery program if you want to learn how to build that muscle. But whether you join or not, this shift is happening.

AI is here.

The old playbook isn’t.

Have a great weekend - Gerry