Diadem Capital: 5x Faster Funding for Startups
In the fast-paced world of startups, securing VC funding is often the make-or-break moment. Diadem Capital has emerged as a game-changer, strategically positioning itself to streamline the funding process for high-growth startups. Its founders, Stephanie Reuben and Joe Hammill, are reshaping the landscape by introducing a novel fundraising platform, promising to expedite the next funding round by a whopping “5x.”
Under the guidance of Launch NY and with a cheerful infusion of $600,000 in a pre-seed round, Diadem Capital, headquartered in Buffalo, is making waves with its innovative VC fundraising platform. Describing itself as a “warm networking hub,” akin to platforms like SeedInvest, Diadem is crafting a unique space that functions as a matchmaking program for both investors and lenders.
Diadem: Wall Street to VC Pioneers
The journey of Diadem’s co-founders, Reuben and Hammill, began two years ago when they delved into the realms of investment banking, capital markets, and Wall Street trading. However, their entrepreneurial spirit led them back to the startup world. Before rejoining Hum Capital, a venture debt fundraising platform connecting companies with lenders, they briefly explored other paths.
In the realm of Hum, Reuben and Hammill identified a critical need among founders. Many were reluctant to part with equity too early in their business journey. To address this, they devised a low-code platform where founders could pitch for VC capital. Diadem’s founders personally review applications, connecting with founders they believe have potential. Once accepted onto the platform, these founders join forces with institutional investors.
Diadem’s Criteria: VC-Backed, $1M ARR, and a Vision for $100M
To be eligible for Diadem’s support, companies must boast VC backing and a minimum annual recurring revenue (ARR) of at least $1 million. On the loan side, the company provides support at every stage, including early-stage companies with ARR as low as $50 million. Reuben’s ambitious vision includes increasing the company’s future ARR to a staggering $100 million.
The success of founders on the Diadem platform is intricately tied to their network and relationships. Investors can directly join the platform, but the true dynamics of their deal remain concealed until they’ve minimized friction and ensured that investors will act on introductions.
Hammill emphasizes, “We check in with both the founders and investors. Founders never get real feedback because the system isn’t set up for that. As a third party VC, we’re creating a place where investors can give honest feedback that is holistic. For example, when three investors gather to evaluate a deal on the first call, the founder gets a data and individual feedback package overall.”
Diadem: VC Wisdom, Speedy Funding
In an era where the slow progression can hinder founders in securing funds, Hammill staunchly defends Diadem’s VC-backed practical wisdom. While the company aspires to assist all founders, it refrains from aiding patch-deck or self-patch companies.
“We won’t turn someone away who isn’t VC-backed and running a phenomenal business,” Hammill asserts. “Patching is part science and part art. We don’t shy away from it, but we prefer them to be VC-backed because at least we know they understand how to patch and close VC.”
Diadem, in its VC early stages, boasts over 100 lenders on its platform and attracts the attention of more than 800 venture capitalists. The traction is impressive, with over 1,500 startups applying, and 17 founders collectively raising over $60 million. Diadem’s unique approach has significantly reduced the fundraising timeline, typically taking four to six months in the equity realm, to a swift two to three months.
Fundability First in VC Revolution
While the founders remain tight-lipped about specific VC revenue figures, they confirm that Diadem is currently generating revenue. Setting themselves apart from competitors, Reuben and Hammill are licensed bankers, adopting a success-based model rather than the common SaaS or pay-to-play models prevalent in the industry.
Reuben sheds light on this distinction, stating, “We’re very different from those competitors who have SaaS models or pay-to-play models where founders have to pay $5,000 VC monthly for the first three months of the early stage. Many times, they don’t get any introductions or very few, or no funds. We’re focused on fund ability.”
Diadem Capital is not just revolutionizing VC fundraising; it’s redefining the dynamics between founders and investors. By providing a space where genuine feedback and connections flourish, Diadem aims to be the catalyst that propels startups to new heights. As the startup ecosystem evolves, Diadem stands as a beacon, offering a more accessible and efficient path to funding for those with the vision to change the world.
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