When diving into the dynamic world of blockchain startups, investors weigh various critical factors. From evaluating the founding team to analyzing the financial and technical health of the company, we’ve compiled the top five insights from presidents and founders. Discover what seasoned professionals consider when deciding where to place their bets in the blockchain arena.
- Evaluate the Founding Team
- Assess Problem-Solving Approach
- Prioritize Founders and Culture
- Consider Market Timing
- Analyze Financial and Technical Health
Evaluate the Founding Team
When evaluating blockchain startups, I focus on the strength of the team behind the project. A skilled, diverse, and committed founding team can significantly influence a startup’s success trajectory. I consider their previous experience in the tech and financial sectors, as well as their track record with prior ventures.
Next, I examine the solution they are offering—how it addresses existing problems in the market. It’s essential to assess not just their technological innovation but also the practicality and scalability of their approach. Furthermore, I look for a clear and sustainable business model that can adapt to market changes.
A startup’s capacity for regulatory compliance is also significant; it indicates foresight and preparedness in an often uncertain legal landscape. In essence, the combination of an exceptional team and a solid vision is vital to my investment decision.
Ace Zhuo
Business Development Director (Sales and Marketing), Tech & Finance Expert, TradingFXVPS
Assess Problem-Solving Approach
When assessing blockchain startups, I pay close attention to their problem-solving approach. For example, we backed a startup that used blockchain to streamline real-estate transactions. Their solution cut processing time by 30%, making transactions faster and more secure. It’s crucial that a startup not only has cutting-edge technology but also a clear plan for addressing real-world issues effectively. This focus on practical impact often signals their potential for sustainable success.
Jonathan Gerber
President, RVW Wealth
Prioritize Founders and Culture
In the past few years, we’ve invested in 14 blockchain startups. Four of them have failed spectacularly, three have successfully exited, and the rest are performing well. Our investment approach prioritizes founders and company culture first. We believe that strong leadership and a cohesive, adaptable team are essential in the dynamic blockchain space. After assessing the strength of the founders and culture, we focus on the technology, ensuring it’s innovative and has real-world applications that address tangible problems.
You have to remember that blockchain technology is still in its early stages, so it’s crucial to invest in startups with a strong foundation that can adapt as the landscape evolves. We look for solutions that can scale, deliver lasting value, and navigate the challenges that come with early-stage technology adoption.
James Ruffer
Founder, web3devs
Consider Market Timing
As someone who has been investing for years now, one thing I consider paramount is the timing when a startup is hitting the market. Entering the market too early might mean that a company could struggle to get customers, while getting in too late could make the space crowded with other names, making it harder to stand out.
Startups that get the timing just right can really set themselves apart. If they’re early to move to a new and growing field, they can prove themselves as a market leader before others catch on.
It’s also important for a startup to be in line with bigger industry trends. If the startup’s solution taps into what’s currently hot, like decentralized finance or NFTs, it can gain traction and attract attention. As an investor, I tend to scour for startups that not only have great technology but also understand where the market is headed and are positioned to leverage the changing trends of the blockchain market.
Yogesh Kumar
Digital Marketing Head, eResource Scheduler
Analyze Financial and Technical Health
When evaluating blockchain startups, I focus on both financial and technical aspects to assess their viability. On the financial side, key ratios like the burn rate (how fast they’re spending capital) and runway (how long they can operate before needing additional funding) are crucial. I also look at their gross margin to ensure their business model can eventually be profitable.
On the technology side, I evaluate the scalability of their blockchain—how well it can handle increasing transactions—and the security measures in place, such as smart contract auditing and encryption protocols. Additionally, a strong developer ecosystem and interoperability with other platforms are key indicators of long-term success.
Ronald Osborne
Founder, Ronald Osborne Business Coach
