How to Assess A Crypto's Founding Team and Experience
One of the most important factors to consider when investing in a crypto project is the team behind it. The team is responsible for developing the vision, strategy, technology, and execution of the project. A strong team can make or break a crypto project, especially in a highly competitive and innovative space.
In this comprehensive guide, we’ll delve into the key factors to consider when assessing a crypto project's team and their background.
Valuable Tips on How to Assess The Team Behind a Crypto Project
The crypto space has known its scams and fraudulent schemes. Just to name a few examples, the creators of an alternative cryptocurrency (altcoin), named Pincoin took over 660 million USD in investor funds and then the team went missing. Another company, LoopX, vanished with 4.5 million USD, while a third, Confido, made off with 374,000 USD and subsequently disappeared. In the latter example, the company’s alleged team members had fake identities.
So, how can you assess a crypto project's team and experience? Here are some tips to help you:
Look at the team's background and credentials
Check their LinkedIn profiles, personal websites, blogs, social media accounts, and any other sources of information that can give you an insight into their expertise, skills, achievements, and reputation. Look for relevant experience in blockchain, cryptography, software development, business, finance, marketing, or any other field that is related to the project's goals and objectives.
Another essential precaution is to verify team members’ authenticity. Some ICOs resort to using fake profiles to conceal the absence of a credible team. If information about the team's members, including their names and faces, isn’t readily available, you can take it as a red flag.
Additionally, it’s customary for ICOs to provide links to their social media accounts on their website, so scrutinize those as well.
Look at the team's track record and reputation
Evaluate the roles and responsibilities of key team members. Additionally, assess the presence of experienced leaders in crucial positions. You should also evaluate the diversity of skills and backgrounds within the team. Diverse teams often bring a range of perspectives and problem-solving approaches. Overall, you should look for evidence of professionalism, integrity, transparency, and accountability.
Once you evaluate the team’s reputation, you should have an answer for each of these questions:
- How successful have they been in their previous projects or ventures?
- Have they delivered on their promises and milestones?
- Have they faced any controversies or scandals?
- How do they handle feedback and criticism?
- How do they communicate with their community and stakeholders?
Look at the team's vision and strategy
When assessing a crypto team’s vision and strategy, you’re essentially evaluating the project’s alignment with your investment goals.
The vision of a project is a reflection of what the team aims to achieve in the long term. It gives you an idea of the project’s direction and its intended impact in the crypto space. A strong and achievable vision is crucial, unlike “vaporware,” which refers to projects that have grand visions but are unlikely to materialize.
The strategy outlines how the team plans to achieve its vision. It includes the technology they plan to use, the problem they aim to solve, and how they intend to navigate the market. A well-defined strategy can indicate a team’s preparedness and adaptability, which are key to surviving in the dynamic crypto market.
When looking for evidence of innovation, creativity, clarity, and alignment, you should seek to answer questions like:
- What is the problem that they’re trying to solve with their project?
- What is their unique value proposition and competitive advantage?
- How do they plan to achieve their goals and objectives?
- How realistic and feasible are their roadmap and timeline?
- How do they measure their progress and performance?
Here’s an example from Internet Computer’s clear overview of their roadmap:
Look at the team's technology and execution
At this stage, you should evaluate the team's understanding of blockchain technology. An experienced team is likely to navigate challenges and implement effective solutions.
You should also gauge the team's knowledge of the cryptocurrency market trends. A team with market insight is better equipped to make strategic decisions.
All in all, you should look for evidence of quality, reliability, efficiency, and usability and get an as clear as possible idea about:
- What is the technical architecture and design of their project?
- What are the features and functionalities that they offer or plan to offer?
- How secure, scalable, interoperable, and user-friendly is their platform or protocol?
- How do they test, verify, and improve their code and products?
- How do they handle bugs, errors, and issues?
Look at the team's community and network
This step is about assessing the team's communication channels and responsiveness. Look for evidence of trust, loyalty, enthusiasm, and cooperation. Transparent and open communication is indicative of a confident and reliable team.
For instance, it’s a good sign when you see a team engaging with its community through social media, forums, or events. Thus, a strong community presence demonstrates commitment and accountability.
Questions you should consider regarding the team’s communication channels:
- Who are the supporters, partners, advisors, investors, and influencers of their project?
- How large, diverse, active, and engaged is their community?
- How do they interact with their community and provide value to them?
- How do they collaborate with other projects or organizations in the crypto space or beyond?
Look at the company’s advisory board and partnerships
A robust advisory board offers invaluable guidance and expertise to a project, drawing upon a wealth of knowledge and experience to navigate the intricacies of the crypto industry. The presence of respected advisors reflects their confidence in both the full-time team members and the project itself.
The caliber of these advisors serves as a direct indicator of the quality of the team, as they’re staking their own reputations by endorsing the project and are unlikely to associate with a questionable team without thorough due diligence.
Furthermore, it’s recommended to assess the team's capacity to forge and sustain external partnerships and leverage industry connections. External support, manifested through partnerships and industry connections, can significantly increase a project's credibility and extend its reach.
Collaborating with established entities in the field creates opportunities for funding, marketing, and strategic alliances. This showcases their willingness to adapt to evolving market conditions and foster sustainable growth.
By following these tips, you can assess a crypto project's team and experience more effectively and make more informed decisions about your investments. Thoroughly examining the team composition, individual profiles, transparency, industry experience, and adaptability, can offer valuable insights into the project's potential for success.
Remember that a crypto project is only as good as its team, so do your due diligence before you invest.
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- Valuable Tips on How to Assess The Team Behind a Crypto Project