The Crypto Angel Investor Checklist
tl;dr: a free checklist to help improve your investment process
Checklist — CLICK HERE
Over the past few years, my journey as an advisor and angel investor in the blockchain industry has afforded me a unique perspective on the early stages of startup development, especially in fundraising. Although my focus has been more on advisory roles and I generally prefer purchasing existing tokens due to liquidity preferences, my experience is extensive. Notably, I reviewed approximately 200 grant applications while working at the Web 3 Foundation (the entity behind Polkadot) and have since assisted dozens of teams.
In the past, I’ve created helpful resources like YouTube videos and a pitch deck template. However, I recognize the limitations of these tools and plan to develop a more comprehensive resource in the future. For now, I’m excited to introduce a new and robust tool I’ve developed: my Crypto Angel Investment Checklist.
This checklist is a formalization of the informal process I use when assessing new projects. It’s designed to be a valuable tool for both project builders and new angel investors. For builders, it provides insight into what investors typically evaluate in new teams. For novice investors, it offers a structured approach to assessing potential investments in early-stage projects. Remember, everything gets easier with experience, and this checklist is a great starting point.
The Need for an Investing Checklist
The fear that a checklist might not be comprehensive enough is common, and it’s true that no checklist can cover everything perfectly. However, my experience has shown that a well-crafted checklist can significantly improve coverage of critical factors, even if it can’t achieve perfection. This is crucial, given the inherently high risks associated with early-stage investing.
Relying solely on memory is often insufficient in this high-stakes environment. A rigorous checklist helps systematically identify potential red flags, enhancing the likelihood of making informed decisions. Yet, it’s important to acknowledge the human element: sometimes, despite what the checklist indicates, investors may choose to follow their instincts. This can lead to poor outcomes, but it also opens the possibility of unexpected success. It’s the classic dilemma faced by investors: balancing the insights provided by structured analysis with the gut feelings that often drive risky, yet potentially rewarding, decisions.
Using of the Checklist
Overview
To kick off, here’s a link to the spreadsheet that houses the investment checklist. Upon opening it, you’ll notice the top section is designated for jotting down essential information about the projects you’re evaluating. I encourage you to make a copy of the spreadsheet and customize it to suit your specific needs.
The main body of the checklist is organized into several key topics, each broken down into more detailed subcategories to ensure thorough assessment. The checklist comprises a series of questions designed to guide your evaluation of a project. As you delve into these questions, you might find it beneficial to add new ones to your copy based on insights you gain during the assessment process.
Here are the primary topics covered in the checklist:
- Team: Evaluating the background, expertise, and cohesion of the project team.
- Ecosystem: Understanding the market and competitive landscape the project operates within.
- Product: Assessing the viability and technical soundness of the product.
- Documentation: Reviewing the quality and comprehensiveness of project documentation.
- Pitch Deck: Analyzing the effectiveness and clarity of the project’s pitch deck.
- Presence: Considering the project’s visibility and reputation in the community.
- Risks: Identifying potential risks and challenges the project may face.
- Investability: Gauging the project’s overall potential for success and return on investment.
Each section is crafted to ensure you have a holistic view of the project, helping you make informed decisions backed by structured analysis.
How to Use the Checklist
The spreadsheet is designed to be straightforward and intuitive. Column B contains the questions that I believe are useful for assessing a project. As you explore each project, gather information from the team’s provided links and resources, and record your findings and thoughts in column F.
In column C, there is space designated for concise answers. These are typically formatted as yes/no responses or a simple 1–5 scale rating. This scoring system is intended to provide a quick visual reference that can help identify potential issues at a glance. For example, a series of red “No” responses might signal significant reasons to avoid investing in the project, which can be particularly useful when reviewing past assessments.
This allows you to quickly reassess areas of concern to determine if improvements have been made over time. Conversely, it is also possible that responses that were initially positive may later turn negative, indicating new areas of concern.
The 1–5 scale aims to capture more nuance than a mere yes/no could provide, allowing for a graduated understanding of each criterion without needing to delve into the full text-based answer each time. In future versions of the spreadsheet, I may refine this system to include a set of aggregate scores for each section, based upon the individual scale ratings.
Additional Resources
For a deeper dive into the nuances of blockchain startup fundraising, consider reading/viewing my blog post and YouTube videos series on fundraising for blockchain startups:
While these are aimed at projects, understanding the overall process will also be helpful for new investors.
I am in the early stages of developing a comprehensive GitBook dedicated to the entire fundraising process. This upcoming project aims to offer an exhaustive guide that covers everything from early-stage planning to securing final round funding, tailored specifically for blockchain startups.
Concluding remarks
Embracing this checklist means committing to a disciplined approach in a field often swayed by speculation and hype. My hope is that this resource will not only refine your investment strategies but also spark a broader dialogue on the importance of methodical assessment within the blockchain space. While memetic investing and lower-quality projects may persist, this initiative is less about enforcing strict standards and more about promoting informed decision-making.
If you have suggestions for improving this checklist or wish to share your experiences, please feel free to comment publicly or privately on this blog. Community insights are invaluable in shaping a more informed and successful investment landscape.
