Democratizing Venture Capital Through VentureStaking with Gerry Hays

When Gerry Hays walked away from practicing law after just six months, he had no idea that losing his life savings of $25,000 on a failed investment at age 27 would shape his entire career. That painful lesson became the foundation for teaching others what he calls "avoiding the fool's tax." Today, as founder and CEO of Doriot and a Senior Lecturer at Indiana University's Kelley School of Business, Gerry has channeled those early setbacks into a mission that could reshape how everyday people access venture capital opportunities.

I was struck by something Gerry said during our conversation. "The right to invest in a company in the future that's winning is more valuable than over investing in something today." It's a simple premise with profound implications for how we think about venture investing. And given my decades of experience structuring deals and watching capital formation evolve, I found his VentureStaking model particularly compelling for this moment in our economy.

THE FOOL'S TAX AND EARLY LESSONS

Gerry's first investment was in a hazardous waste processing technology. He knew the space intimately from his work at the Indiana governor's office, where he ran lobbying for the Department of Environmental Management. The technology made sense. The market opportunity was clear. But the founder couldn't execute. "When you invest, you are really investing in the founders more so than the idea," Gerry explained. "And I just was a bad picker of founders at that point in time."

That hard-won wisdom shaped everything that came after. He didn't touch startup investing again for ten years. Instead, he became a founder himself, launching HomeYeah.com during the dot-com boom. The timing seemed perfect. The internet was disrupting everything, and real estate felt ripe for change. He acquired a small Indianapolis company with 25 lawn signs and built it into the 11th largest real estate company in Indianapolis by transactions, growing from zero to $1.8 million in revenue in just 20 to 24 months.

But capital was the constraint. "Why is it so hard for me to be able to raise capital?" Gerry wondered at the time. He was in the Midwest, not California. He didn't have the right connections. That challenge would haunt him and eventually drive his work at Doriot. The company ultimately sold to Help-U-Sell Real Estate in 2003, but not before navigating the perfect storm of aggressive expansion, 9/11, and a market that completely froze.

BUILDING IN FRIED CHICKEN AND TEACHING VENTURE CAPITAL

After selling HomeYeah.com, Gerry received an invitation that would anchor the rest of his career. Indiana University wanted him to teach a new venture capital course. He's been there ever since, creating what he calls a bridge between academic theory and real-world startup practice.

Meanwhile, he wasn't done building companies. With his brother, he started Charlie Biggs Food Company, taking their fried chicken program to southern grocers. "If you can imagine a Yankee going down to the south and telling that their fried chicken is no good," Gerry laughed, "it took me two and a half years to get my first sale." Once trust was established, they scaled from zero to $10 million over five years, bootstrapped all the way. Eventually, he was able to exit through a private equity recap, allowing his brother to continue running the business while Gerry focused on his teaching and the problem that had never left his mind.

THE COST OF STARTING IS COLLAPSING

In our conversation, Gerry made a point that resonates with everything I'm seeing in deal structures today. "You would've needed to raise $5 million 10 years ago to create what you can create in a day today for 50 bucks. Right. It's just insane. And that's only going to increase."

He's absolutely right. When I started my law firm decades ago, we had servers in a closet. We ran wires. The infrastructure costs were significant. Ten years ago when I relaunched the firm, it was laptop computers and $500 a month in cloud computing. Today, with AI agents, no-code platforms, and cloud services, the barriers to entry have practically disappeared.

This creates a fascinating dynamic in venture capital. Founders need less capital to start, which means they can maintain more ownership. But it also means the landscape is more crowded. The question becomes how do you identify the breakouts early, and how do everyday investors participate without taking massive risks?

VENTURESTAKING AS VENTURE POKER

Gerry's answer is what he calls VentureStaking. The model is elegantly simple. Founders who are just getting started can raise small grants, typically $25,000 to $100,000, by pitching to a community of venture stakers. These stakers might contribute $10, $25, or $200. The money comes together as a grant with no strings attached.

If that founder shows traction and raises a real equity round, the venture stakers get invited to participate at 10 times their initial stake. "Out of 25 deals where you give someone 10 bucks, you may only see three deals that are worth investing in," Gerry explained. "But that's better than putting a thousand dollars into 25 deals."

He likens the entire process to poker. You play many hands. You fold most of them. But when you spot the real winners, you bet heavy. "You wanna turn a hundred dollars into a hundred thousand dollars," he said, using Stripe as an example. "If you got into Stripe, you would've turned a hundred dollars into 3 million."

The model addresses something I've seen consistently in my work with dealmakers and investors. Diversification is critical in venture, but most people can't afford to write $25,000 checks across 20 companies. VentureStaking lets someone build that diversified portfolio for $500 total, learning along the way by watching founders report progress.

UNIVERSITIES AS VENTURE ECOSYSTEMS

Where Gerry's vision gets really interesting is bringing this model to universities. Indiana University has 70,000 students across all campuses and 800,000 alumni. Imagine creating what he calls a VentureStaking Arena where students and alumni can apply for grants, pitch their ideas, and build companies with support from their own community.

"Every university is thirsting for new ways to drive innovation, to become and remain relevant in today's fast changing economy," Gerry noted. "We're not training you for jobs that were here 20 years ago. The future is a lot more uncertain, so it requires a whole new set of skills."

From a deal structure perspective, this is fascinating. You're essentially creating a talent pipeline and funding mechanism within a defined community. The shared information, shared risk, and shared prosperity model could capture innovation that traditional venture capital misses entirely. Students who might never get in front of Sand Hill Road VCs suddenly have access to capital and mentorship from their own network.

THE SAM ALTMAN EXAMPLE NOBODY TALKS ABOUT

One story Gerry shared stopped me in my tracks. Before Sam Altman became the face of OpenAI, he worked for Y Combinator. In 2009, he wasn't even an accredited investor by SEC standards. But he was given an opportunity to invest $15,000 in Stripe. That investment is now worth $650 million.

"If you would've subdivided that 15,000, divided it by a hundred, so you could give 150 people that same opportunity, then you would create 150 millionaires by that one investment," Gerry pointed out. Access has always been the game in venture capital. The best deals go to the connected. VentureStaking is trying to break that dynamic.

TOKENIZATION AND THE OWNERSHIP ECONOMY

Gerry believes we're heading toward what he calls an ownership economy, enabled by tokenization. Small companies that generate consistent cash flow but aren't billion-dollar exits could tokenize their equity. Imagine owning tokens in 150 companies, each generating $300 to $500 per year in distributions. "You could build a nice little lifestyle by owning companies that are operating by AI agents primarily," he suggested.

The SEC is working on frameworks for a more liquid market for small cap opportunities. Combined with the dropping cost of starting companies and AI's ability to scale operations without traditional headcount, Gerry sees a future where wealth cultivation looks very different than it does today. "We're on the frontier of this," he said. "We have to imagine what the future looks like, and my motivation is to bring as many people along in this process as possible."

THE SHARK TANK STORY

No conversation with Gerry would be complete without discussing his Shark Tank appearance. Actually, his former student's Shark Tank appearance where Gerry was the phone-a-friend. The student had built a coat checking business using brand new iPads. Mark Cuban offered $250,000 for 35% equity. After talking with Gerry, who pointed out that existing SAFEs would push the founder below 50% ownership, the student passed on Cuban's offer.

"Everyone's shocked," Gerry recalled. They kicked off Season 4 of Shark Tank with that rejection. The publicity from saying no to Mark Cuban was probably worth more than the deal itself. The student is now building a very significant company and retained control.

SPORTS BETTING VERSUS WEALTH CULTIVATION

One of Gerry's most pointed observations was about societal priorities. "We've made sports betting legal. Our prediction markets are like booming. So we are training our young people of like fast moving money and dopamine hits." He sees this as teaching people to consume their wealth rather than cultivate it.

"The thing about venture investing is that you, this is a cultivation game. You're cultivating wealth. You're dropping seeds into the ground and this miraculous thing called the universe ends up like bringing something back to you." He told me about giving a young man $5,000 who wanted to build something in the travel industry. The founder pivoted to AI and Shopify and just raised $8 million at a $55 million valuation. That $5,000 investment is now worth over $200,000.

The bet wasn't on the idea. It was on a founder who wouldn't quit. And that's something you can only discover by playing the game, by getting yourself into wealth-building activities where you're patient, watching, and learning. As Gerry noted, Warren Buffett created 99% of his wealth after age 65. This is a long-term game.

FREEDOM FROM SCARCITY

When I asked Gerry about freedom, his answer cut to something fundamental. "Being free from a scarcity mindset is like so big for me," he said. "There's so much where you, we look out here and it's all like, everything is around scarcity. And to like, let go of that and to go inward and realize and see how abundant things really are."

It's an insight that applies to venture capital, to dealmaking, to entrepreneurship, and to life. When you operate from abundance rather than scarcity, you see opportunities differently. You can afford to be patient. You can take calculated risks. You can help others succeed knowing there's enough to go around.

Gerry's work at Doriot is ultimately about expanding the pie. More founders with access to capital. More investors with access to opportunities. More education around how to play these wealth-building games without losing your shirt. After decades of doing deals, I can tell you this matters. Capital formation is evolving. The question is whether that evolution will democratize opportunity or concentrate it further. Gerry's betting on democratization, and I'm excited to see where it leads.

FOR MORE ON THIS EPISODE: https://podcasts.apple.com/us/podcast/dealquest-podcast-with-corey-kupfer/id1451959848

FOR MORE ON GERRY HAYS:
https://www.linkedin.com/in/gerryhays/
https://doriot.com 

FOR MORE ON COREY KUPFER
https://www.linkedin.com/in/coreykupfer/
https://www.coreykupfer.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!