VentureStaking® Arenas: The Pre-Seed Venture Fund of the Future

(Part 3 of 4 - Why organize around retail investors)

September 15, 2025

Delivered September 15, 2025 @ 11:00am ET

Weather in Bloomington, IN - Indian summer day, sunny and hot 300 C / 860 F

Table of Contents

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 where practical advice meets mindset meets execution—for anyone ready to play the startup game.

VentureStaking® Arenas: The Pre-Seed Venture Fund of the Future

Part 1 of 4 - The Setup

Part 2 of 4 - Pre-seed is the holy grail

Part 3 of 4 - Organizing around retail

Part 4 of 4 - The economics of owning an Arena

These are excerpts from the upcoming Doriot® Whitepaper on VentureStaking® Arenas — a new venture platform designed for emerging fund managers seeking a competitive edge.

Part 3 of 4 - Why organize around retail

If you’ve been following the major developments in finance and venture, one theme is clear: retail investors are coming into private capital markets.

According to State Street’s Private Markets Survey, the “Retail Revolution will drive 50%+ of private market flows by 2027.”
🔗 State Street Private Markets Survey

That represents billions in inflows over the next few years. For the big players, the benefits are obvious: a massive new pool of “passive” investors, more fee-earning potential, and first-mover advantage for those who create the right products.

We’re already seeing innovation across multiple fronts. And now, with Trump’s executive order allowing 401(k) accounts to invest in private capital and debt, the stage is set for the next frontier of private markets: retail.

In last week’s article, I explained why pre-seed is the optimal entry point for retail venture. At the pre-seed stage, there’s far less competition from traditional venture — funds and angels rarely write pre-seed checks.

VentureStaking® is designed to let small investors efficiently organize around a founder, back them at the very beginning, and stay with them through the journey. But the key isn’t just getting a retail investor into a single deal — it’s helping them understand that venture is a game of diversification. The real strategy is planting multiple seeds (i.e. make multiple small bets), knowing that only some will grow into strong, wealth-building opportunities.

The Challenges of Bringing Retail Into Private Markets

But bringing retail into private markets won’t be simple. There are a couple of issues that must be overcome:

  1. Know what they own. Unlike public markets, private capital is not nearly as transparent. Retail investors can’t feel like their money has disappeared into a “black hole.” Transparency is critical;

  2. Liquidity. Investors want the option to exit, even at a loss. That means there needs to be real innovation around creating liquidity — which will not be easy;

  3. Accessible and “spoon-fed” strategy. A miscalculation around retail venture has been that retail investors are looking for venture deals. They’re not. Thus, retail venture investing has to be framed differently from traditional venture.

Successful retail venture investors will be active

And, another hurdle is that venture investing is an active sport, not passive.

Today there are over 100 million trading accounts in the U.S. where retail investors actively buy and sell stocks, crypto, and ETFs.
🔗 2023 Retail Investor Report

Thus, we estimate there are 10M+ potential active retail investors who would step in if given an accessible and winnable game, which represents a $10 Billion opportunity.

What We’ve Learned

We know this because we’ve already collected 1.5M+ data points from 14,000+ players in our venture investing simulation, FantasyStartup. That experiment showed us what it will take to get retail investors into the venture game.

We call it VentureStaking®, and our distribution model is to scale globally through VentureStaking® Arenas.

Starting in 2026, anyone will be able to launch an Arena around a mission or thesis. If thousands of retail investors also align with that mission, the odds of building a successful Arena are very high.

As mentioned previously, a venture fund could launch a pre-seed Arena, organizing retail around its thesis and building a pipeline of deal flow. Instead of running to LPs for capital, retail finances the deals, and the venture fund running the Arena earns market-making fees.

Arenas can also form around diasporas — for example, Nigerians across the globe backing Nigerian entrepreneurs at the pre-seed stage.

What Makes VentureStaking® Unique?

  • Organizes venture around retail by giving them a fast, accessible, winnable game: Should I VentureStake® this founder at the very beginning of their journey?

  • Prediction market dynamic: With every founder vetted, the decision comes down to one question: “Do I believe they will succeed?” If enough VentureStakers agree to give a founder a shot, this offers an important signal to the market.

  • Low barriers to entry for beginners: A retail investor can stake as little as $10 per founder to begin following, tracking progress, and deciding whether to invest real capital at seed — if the opportunity comes.

  • System scales to professionals: Individuals with bigger check books can play the same efficient game of investing.

Why it will work for the retail investor

VentureStaking® checks all the boxes. Yes, there will be a need for education, but the retail investor is ready for this. It just has to be presented in a way they can quickly grasp. Once they start playing, they won’t want to stop. And if they play the game as designed, they have the opportunity to lock in above market returns with the chance at hitting it big.

Next week, I will share the economics of owning a VentureStaking® Arena. Wishing you a focused and fulfilling week,

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