Delivered September 25, 2025 @ 12:00pm ET

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Table of Contents

• VentureStaking® Arenas: The Pre-Seed Venture Fund …

• Part 4 of 4 - The economics around owning an Arena

  • How VentureStaking® works (in plain terms)

  • Why now

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 4 of 4 - The economics around owning an Arena

In 1946, Georges Doriot - often called the Father of Venture Capital - launched the first modern venture fund, American Research and Development Corporation. What most people don’t know: Doriot chose a publicly traded structure so that everyday investors could participate in this new asset class.

The SEC didn’t know what to make of it. Regulation written for a different era got applied to something brand new, and the compliance burden made early-stage company building harder, not easier. The industry pivoted to the limited partnership (LP/GP) model that still dominates today: the General Partner puts in ~1% of the capital, raises the remaining ~99% from Limited Partners, charges ~2% annual management fees for seven years, and takes ~20% of the profits (“carry”). On a $25M fund, that’s roughly $500,000 per year in fees (about $3.5M over seven years) before a dollar of carry shows up.

This model has worked for decades - but it also created pressure to raise bigger and bigger funds to support higher fee bases and larger teams. Bigger funds must deploy more capital, faster, while still finding alpha.

The predictable casualty has been the pre-seed: messy, tiny, high-variance checks that don’t fit a scaled fee machine. Today, well under 1% of venture capital reaches pre-seed, and much of angel capital has followed the same gravity. The result: pre-seed remains disorganized, underfunded, and opaque.

VentureStaking® is our answer.

Because retail investors can’t practically be LPs in a pre-seed fund under current rules, we had to design a different system - one that keeps retail in the driver’s seat at the very start while aligning incentives for the institutions that nurture founders.

How VentureStaking® works (in plain terms)

• Arenas are licensed to trusted institutions—Universities, Communities, Venture Funds, Startup Studios — to aggregate their base of support and direct pre-seed grants to vetted founders.

• Retail participants back founders at scale, with shared information and clear rules, allowing retail investors to ride along on the journey and close the asymmetry gap for when the founders are raising their first equity round (something that crowdfunding has not been able to achieve).

• The Arena earns a market-making fee for curating, supporting, and governing the process.

  • Example: at a 15% fee, a $200,000 grant generates $30,000 in Arena revenue.

  • If an Arena facilitates $5M in founder grants per year (i.e 25 - 50 founders get their start), that’s $750,000 in annual revenue to operate the Arena sustainably.

For Startup Studios, the benefits compound. The same $5M in founder grants becomes budget founders can spend on Studio services—turning what used to be “capital we must raise to operate” into earned revenue. That’s the path from investor dependence to cash-flow positive operations.

For Universities, an Arena transforms alumni and student enthusiasm into $10M+ annual founder grants without landing on the expense line—creating a new, mission-aligned revenue stream and a powerful engine for translational entrepreneurship.

This is not a venture fund. It’s a market system that makes the pre-seed legible, supported, and scalable—with the people who care most empowered to act first.

Most importantly: once a founder uses the grant period to prove real traction, their VentureStaking® community stands ready to participate in a Regulation Crowdfunding (Reg CF) raise—mobilizing up to 10× their initial VentureStake (subject to issuer/platform eligibility and applicable limits). The result: faster capital, tighter alignment, less friction.

Why now

• The pre-seed gap is getting worse, not better.

• Retail wants real access and fair rules, not shiny promises.

• Institutions need sustainable models to support founders earlier, faster, and with accountability.

VentureStaking® gives all three what they want: access for retail, sustainability for institutions, and better odds for founders.

Doriot’s original impulse was simple and right: let the public participate in building the future. VentureStaking® updates that impulse for the world we live in—cleaner rules, better alignment, and a system designed for the messy, magical pre-seed where the next decade is born.

Have a successful and focused week!