Want an unfair advantage in crypto? Learn to evaluate like a VC.

Covduk
5 min readMay 20, 2022

Crypto & NFT projects are essentially startups. Learning to evaluate a startup like a VC gives you an unfair advantage in crypto.

Here are the lessons to learn from how VCs evaluate startups & projects.

Investors look for a couple of key things:

  1. Problem & Need

2. Product & value proposition (Utility)

3. Team

4. Market

5. Differentiation & Competition

6. Go to Market

7. Traction

#1 Problem & Need

Projects need to solve a need or a problem. Investors want to know if the problem NEEDS to be solved or if it would be nice to solve.

More pressing the problem, the more successful the startup.

There was no censor resistant, transparent store of value that suited the needs of the digital age. BTC created a decentralized, borderless store of value & solved that problem

ETH struggles to scale & has high gas costs. Alt chains like AVAX & Terra solved that problem.

Crypto Lessons: More pressing the problem, the more money you can make.

Pressing problems are more likely to be solved ASAP & will make the most money. Identify problems — bad interfaces, high costs, poor experiences, long wait times — in your crypto journey.

The more painful it is to deal with, the more closely you should look at that space. Invest in protocols & projects that solve painful problems.

#2 Product & Value Propsition (Utility)

Investors want to understand the solution the startup is building to solve the problem.

  • What is the tech they’re using? Is it feasible
  • Is it actually solving the problem?
  • What is the value created for the users
  • ROI

Crypto Lessons: Read the white papers (they’re not as scary as they seem). As you read many, you’ll be able to gauge the feasibility & understand the tech. Or, read their breakdowns.

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Covduk

I write crypto 101s, dive dives and how tos. Crypto | NFTs| DeFi