Knowledge Base

  • General

  • How secure are you?

    Given this industry, security is a top priority of ours. Any extremely sensitive information like driver's licenses for KYC are passed through to our providers and never stored by us. Any personally identifying information (PII) that we must store (user's name, phone, address etc.) are encrypted in our database. All offer documents are stored in private and secure Amazon S3 (simple storage service) buckets. Access to any and all information within the platform are gated by user roles and privileges, ensuring that only those with the proper authorization can view them. https://wealthblock.ai/agreements/privacy https://wealthblock.ai/agreements/terms

  • Who is in your network?

    Professional Investors, connected Syndicators, Entrepreneurs and industry partners who pool their relationships, credibility and insights to fund and grow high-potential ventures.

  • Where is your office located?

    Diffuse by its nature (and name) is a distributed operation and prides its Ecosystem spans as many geographies as possible.  That said, the core Diffuse employees are currently primarily based in Chicago and Singapore.

  • What does “carry” mean?

    When a Syndicator refers an Investor to an investment, the Syndicator is remunerated for the effort with a percentage of the eventual profit of the investment.

  • What do you mean by Commission free?

    To ensure the shared objective is the long-term success of the startup, instead of paying a cash commission for their capital, professional Investors and Syndicators are incentivized with carry on the deals they source, vet and close.

  • How do I join Diffuse?

    If you are a professional Investor, Entrepreneur, VC, Syndicator or Individual Investors and would like join Diffuse, contact us.

  • How big are the checks you write?

    Thanks to our deal management platform, we can invite Investors with tickets from $10,000 to $100,000 and above to participate, which means that we can get more capital to vetted ventures, quickly.

  • Are you a VC, do you have your own fund?

    We are a VC in the sense that we provide venture capital to startups, but we do not have our own fund (although we do operate a few, see the below section on “VC in a box”).  All investments are made on a deal by deal basis.

  • Syndicators

  • Do Syndicators have to be registered or licensed?

    We operate as an Exempt Registered Advisor (ERA). This means our regulatory lift consists of a tiny upfront fee and an annual filing of Form ADV. The reasons we're exempt are twofold: First, we are venture investing, which has an explicit exemption and second, we're not earning commissions. Carry doesn't count because there are fewer conflicts of interest.

  • Who can be a Syndicator?

    Our Syndicators are world class networkers from all walks of life who have a “help first” attitude towards both their contacts and the startups we invest in. Our Syndicators are Investors first and, with very few exceptions, have done multiple deals with Diffuse prior to becoming a Syndicator.

  • What is the minimum amount that a Syndicator must syndicate in order to earn a share of carry?

    It is the same as the minimum investment amount for an Investor above. It will vary from deal to deal but will never be less than $10,000.00.

  • What is the minimum amount that a Syndicator must syndicate in order to earn a share of carry?

    It is the same as the minimum investment amount for an Investor above. It will vary from deal to deal but will never be less than $10,000.00.

  • What if an Investor has been in contact with multiple Syndicators before investing in a deal?

    The Investor self-reports which Syndicator, or Syndicators, referred them to the deal. In the event multiple multiple Syndicators feel they are due carry, Diffuse will attempt to broker a fair division based on the Syndicators’ level of involvement, whether they are investing themselves, when they contacted the investor, etc. No investment will be accepted unless all parties agree to a split.

  • What do I get by becoming a Syndicator?

    There are tons of advantages to being a Syndicator, including:

    • Earn part of Diffuse’s share of carry from any investor you invite into the deal.
    • Pay lower carry on direct investments.
    • Network with our Syndicators and Leads at exclusive events
    • Get trained in venture investing with an eye towards becoming a Lead
    • Access to the Diffuse partner network and dedicated resources help the investment succeed

  • Is there any expense to be a Syndicator?

    Yes, Syndicators have to pay a modest annual due. Carry is what we really care about, but we need some cash flow to cover our minimal administrative overhead. Your dues are a function of the number of pods you join.

  • What do I get by becoming a Syndicator?

    There are tons of advantages to being a Syndicator, including:

    • Earn part of Diffuse’s share of carry from any investor you invite into the deal.
    • Pay lower carry on direct investments.
    • Network with our Syndicators and Leads at exclusive events
    • Get trained in venture investing with an eye towards becoming a Lead
    • Access to the Diffuse partner network and dedicated resources help the investment succeed

  • Is there any expense to be a Syndicator?

    Yes, Syndicators have to pay a modest annual due. Carry is what we really care about, but we need some cash flow to cover our minimal administrative overhead. Your dues are a function of the number of pods you join.

  • How often will I see deals as a Syndicator?

    Expect 1-4 fully vetted and credible investment opportunities per pod per month.

  • How are Syndicators organized?

    We organize Syndicators into “pods” segmented based on investment thesis and allocation sizes. Early stage fintech is the first pod and we will be creating more pods as we feel we have enough Leads with particular domain expertise to be credible.

  • Entrepreneurs

  • What benefits does the startup receive in addition to the initial cash injection?

    The benefits fit into 3 segments. Firstly the startup receives capital from a source which is structured to participate in follow on rounds, which means the founder can focus on building the business instead of chasing check. Secondly our partnership network offers, from CRMs to entrepreneur friendly banking and hosting perks. Thirdly, given each investment belongs to a domain expert pod, there is a strong community of Investors, Leads and Syndicators supporting each founder. Especially since only if the entrepreneur gets paid, does the Diffuse ecosystem receive a check.

  • What benefits does the startup receive in addition to the initial cash injection?

    The benefits fit into 3 segments. Firstly the startup receives capital from a source which is structured to participate in follow on rounds, which means the founder can focus on building the business instead of chasing check. Secondly our partnership network offers, from CRMs to entrepreneur friendly banking and hosting perks. Thirdly, given each investment belongs to a domain expert pod, there is a strong community of Investors, Leads and Syndicators supporting each founder. Especially since only if the entrepreneur gets paid, does the Diffuse ecosystem receive a check.

  • If I want to list my own company, can I?

    Yes, you can pitch an investment allocation that you want to syndicate to Diffuse. We will then pass it along to our Leads and leave it up to them to see if any of them they would like to continue the process.

  • If I refer an investment, do I receive carry?

    Yes, if you refer an investment to Diffuse, you receive a 20% referral fee of the carry that Diffuse would have earned on the investment, eg 1%

  • How big is the average size of an investment that Diffuse makes into an early stage venture?

    The average investment amount is $500,000. This figure depends on the allocation that the Lead Investor was able to secure for Diffuse.

  • Investors

  • Why are you better than/different from other syndication networks?

    Two main things: 

    1. We are driven by carry, not a “success fee” (read commission). We make money when the investor makes money so we have a strong motivation to help our companies in every way possible, right up until an exit.   Most syndicator networks just take a percentage of the amount raised up front and promptly forget about both the company and the investor.
    2. Our Lead Investors are domain experts and professional investors. Most syndication networks are run by inexperienced investors looking to cut their teeth in venture capital.  See more about this in the “manifesto.”

  • What is the minimum check size that Diffuse’s ecosystem will accept from an Investor?

    The minimum investment will vary from deal to deal but will never be less than $10,000.00.

  • What if the entrepreneur wants to pay cash instead of carry?

    We would politely but firmly tell them no.

  • What do I get if I refer someone to the Diffuse Ecosystem?

    You get rewarded. If you refer a Lead Investor, Investor or Syndicator, you receive a 20% referral fee on the referred person’s carry earned on investments made in the first year of joining Diffuse (10% for the second year, 5% for the 3rd year and 3% in perpetuity). For more on referring investments instead of members, see the Investment Section.

  • How risky is an investment?

    As illustrated here, very! We invest in unproven startups and a myriad of things can go wrong.  Do NOT invest anything you are not able to lose.

  • How long until I receive any proceeds from my investment.

    This varies from investment to startup. Sometimes a startup will exit months after an event and sometimes decades.  As a rule, venture capitalists say 7-10 years, but there’s nothing hard and fast about that.

  • How do you vet your members?

    Our Leads and Syndicators all undergo a thorough background check and have to be referred into the Ecosystem by an existing member.  We also have a zero tolerance policy where if any member takes a morally questionable action we will immediately remove them.

  • How do the Special Purpose Vehicles work?

    For each Diffuse investment, we create a new legal entity (Special Purpose Vehicle or SPV) which makes the investment in the startup.  The SPV also enters into an agreement with Diffuse to allocate the Ecosystem any earned carried interest. We partner with a third party SPV administrator to handle all legal work, bookkeeping, tax filing, investor money collecting, and distributions.  The SPV admin charges on a standard fee schedule (roughly $10k/entity) which is paid by the entity itself.

  • Lead Investors

  • Who can be a Lead?

    Anyone who is an experienced investor with deep domain expertise in a particular area (where they have been investing).

  • What is the minimum allocation that a Lead can bring to the Diffuse ecosystem for syndication?

    The minimum allocation is $200,000. Below that the SPV administration cost is too large relative to the investment to make it worthwhile.

  • What do I get out of it?

    In a word: leverage. You’re already making investments so all you need to do is secure for Diffuse an allocation above and beyond your normal check size and you’ll earn additional carry. We also will accept pro rata rights that you’re unable to exercise in later rounds so you continue to earn more carry rather than getting squeezed out of the round.

  • How do you track who gets how much carry?

    Whenever we make an investment, all participants sign a side letter which clearly states who will receive what amount of carry.  We then store this information in our internal books and records.

  • VC in a Box

  • What is VC in a box?

    Many new VC managers simply don’t have direct experience running a fund. We have decades of it. It doesn’t make any sense for a manager to spend their time interviewing service providers and reinvent the wheel...leave that to us. We’ll handle every aspect of running your fund (even down to marketing and positioning help) so you can focus on raising capital and working with Entrepreneurs. Everything is built on top of the core Diffuse infrastructure, so you know you’ll be adopting an institutional grade infrastructure.

  • How much does it cost?

    It varies massively based on fund thesis and number of investments, investors, and lead vc follow on investments. Reach out to [email protected] if you’d like to learn more.