The lifeblood of any project, particularly in the early stages, lies in the team driving it. In stages such as pre-seed and seed rounds, when the product is often just a concept and no tangible product has been built yet, the value and potential of the project are intimately tied to the team behind it. Their vision for the future, their collective experience, and the dedication they bring to the table are all vital to the success of the project.

1. How big is the team? Evaluating the size of the team is essential. The complexity of the project must be mirrored by the size and capabilities of the team. For instance, creating and maintaining a protocol fork is a less complex task and requires fewer hands, while conceptualizing and building a ground-breaking platform or industry-specific solution demands a larger team with diverse skills.

2. What experience does the team have? Industry and project-specific experience within the team are critical. If team members lack experience in the field, they might find it challenging to address all the intricate issues that could (and likely will) surface during the development phase. While learning on the job is always an option, an experienced team brings efficiency and speed to the table, saving costs and increasing the odds of success. LinkedIn is an excellent platform to delve into each member's work history, their roles in previous positions, and even endorsements they've received from their peers.

3. Are the team members committed to the project full time? For projects in their infancy, without funding from previous rounds, it's possible that team members are juggling multiple commitments. However, if a project has received funding and it's discovered that the founders are still working on several projects simultaneously, this raises a red flag.

4. Does the team cover all the necessary positions? In the early stages of a project, particularly when funding is limited or non-existent, it's possible that some roles might not be filled yet. Positions like marketing, HR, and legal may still be vacant. But the core positions, like the CTO, CEO, and developers, should be filled already. This is because the core team serves as the backbone of the project, driving it forward from conception to reality.

5. Do the team members noteworthy advisors? This could be a positive signal if they've already attracted the interest of influential advisors who now support the project.

6. Have the team members previously collaborated? Team chemistry is vital. If the team members have a history of working together, they might have established a productive dynamic. However, this doesn't guarantee success.

7. Where is the team based? Some countries have ambiguous or restrictive regulations regarding the crypto industry. It could pose a risk if the team is from one of these countries.

8. Is the team public or anon? Generally, a public team is preferable. An anonymous team presents higher risk, though a sound explanation for their anonymity could reduce this concern. But it's always important to remember that the risk of a scam is higher with anonymous teams.

9. When did the team start on the project and why? If the team has been working on the project for a long time without making significant progress, they may lack motivation. Understanding their reasons for initiating the project can help evaluate their vision and intentions. Are they merely seeking quick profit, or do they genuinely believe in the value of their creation?

10. Does the team pass reference checks? Contacting past employers, colleagues, or industry contacts can yield valuable insights into the team members' abilities, work ethic, and reputation.

11. How is equity distributed within the team? Gaining insight into the equity distribution among team members can shed light on team dynamics and the expected contributions of each member.

12. What is a team exit strategy? Knowing the team's exit strategy is essential. This could range from potential acquisition or IPO plans to other forms of exit.

Tokenomics and token utility can often be a deciding factor for a project. If well-structured, they can significantly contribute to the project's success. However, poorly designed tokenomics could hinder profitability and dampen enthusiasm. Strangely enough, some projects with less favorable tokenomics still succeed, often because many people don't grasp key concepts like FDV (Fully Diluted Valuation) — and it's definitely not just a meme.

1. What is the project valuation? Comparing a project's Fully Diluted Valuation (FDV) with its competitors can help gauge its potential, especially if it were to become a leader in its field. However, market phases and fundraising stages often influence project valuations. High valuations should be backed by solid reasoning.

2. What are the cliffs and vesting periods? For an investor, the key goal is achieving profitability. This leads many venture capitalists to prefer shorter vesting periods, enabling them to recover their investment quickly. However, this approach isn't always healthy for the project's longevity. If early investors can unload their tokens rapidly, their incentive to continue supporting the project diminishes. So, achieving a balance in vesting schedules is crucial. An unusually short token release period to early investors could be a warning sign that the project might not have a long lifespan.

3. What is the token utility? In the honest assessment of many crypto projects, a token isn't necessary. For instance, if a token's sole purpose is to facilitate DAO governance, its utility is questionable. However, if a token's utility involves sharing project revenue with token holders, it edges towards being labeled as a security, a classification with its own legal implications. Considering the groundbreaking utilities offered by tokens in projects like Curve or GMX, it's vital to evaluate if there will be enough token demand and whether the token's utility will entice people to buy.

4. Token distribution A broad distribution of tokens among a large community is the ideal scenario to prevent price manipulation by a few powerful entities or 'whales'. Having deep liquidity pools also guards against easy price manipulation. Red flags arise if the majority of tokens are held by the team. Ideally, if there's a project treasury, it should be managed by DAO governance.

5. What are the price differences between rounds? It's crucial to compare project valuations across fundraising rounds. While lower prices than future rounds may initially seem attractive, they can complicate fundraising efforts, particularly during a bear market, heightening the risk of project failure.

6. TGE The team should provide the date for the Token Generation Event (TGE), or at least an estimated timeframe. If they can't specify a date, perhaps due to market uncertainties, they should provide a target quarter for the token's release.

To fully understand a project's potential, we must also consider its traction and popularity on social media. This can reveal the level of interest from the community and influential individuals. Moreover, careful examination can help detect any attempts by the project to artificially inflate its following using fake accounts. Here are some key areas to focus on.

1. Twitter followers Checking a project's total follower count on Twitter provides a basic measure of its popularity. A count below 10k often suggests limited traction or hype. But don't stop there. A smaller follower count with many influential followers might indicate a project with hidden potential. Make sure to follow key influencers on Twitter to see which projects grab their attention. Tools like tweetscout.io can help with this. Conversely, a large follower count isn't always meaningful if many followers are bought, not earned. Running a Twitter audit can help identify the percentage of real followers.

2. Engagement With Twitter now showing the number of impressions for each tweet, it's simpler to compare the number of followers to impressions. This comparison helps gauge the credibility of the follower count. For smaller, newer communities, the follower-to-view ratio is usually about 5 to 1, but this decreases as the community expands due to early followers becoming inactive.

3. RT-LIKE-VIEWS For typical tweets and threads, the engagement distribution tends to follow this pattern: 1 Retweet to 2.5 Likes to 600 Views. Unusual deviations from this ratio could suggest non-organic engagement.

4. Cross-Platform Consistency If a project has 20k Twitter followers but only a few hundred on Discord, Medium, or Telegram, something might be off. Typically, follower distribution should maintain a certain ratio across different platforms. So, carefully examining numbers across various platforms can help identify any potential manipulation.

5. Branding The power of a project's branding can play a pivotal role in its perceived value and the traction it gains on social media. Good branding goes beyond just a catchy logo or an attractive color scheme. It encapsulates the project's identity, mission, and values, making them easily understood and attractive to potential supporters. Remember, though branding isn't the be-all and end-all, it is often an indication of the team's commitment and professionalism, which can significantly influence the project's success.

Evaluating an investment prospect often involves navigating through the labyrinth of competition in the space. It's a rare occurrence to stumble upon a project that is truly a pioneer in its field. Most projects claim a distinct approach, but it's essential to discern the actual magnitude of this difference. A thorough competition check sheds light on product-market fit, potential valuation, and user interest in the product.

1. Defining the competition Your task here is to identify projects that closely align with the one you're analyzing. This might include existing players in the field, such as DeFi applications or infrastructure platforms. It's also crucial to consider emerging projects that have not yet fully launched but show promising potential. This comprehensive evaluation helps paint a fuller picture of the competitive landscape the project is operating within.

2. Partnership landscape A clear understanding of the competition enables the investor to compare the partnerships and backers each project has. If major VCs and institutions back the competitors while the evaluated project lacks similar support, it may struggle to gain traction.

3. Valuation Comparison Suppose there is a leading competitor in the field with a functional product, high user engagement, and well-established reputation. In that case, the new project should aim for a significantly lower valuation, potentially around 0.2 times the fully diluted valuation (FDV) of the competitor. This valuation recognizes the uphill battle to overtake the incumbent but allows for potential growth.

4. Unique Selling Points (USPs) Pitch decks often include comparisons between the project under consideration and its competitors. However, many purported advantages are mere vaporware, offering no real edge. Without a clear and genuine USP, an investment in the project can seem unappealing. Simply replicating a successful project doesn't guarantee success.

5. Market saturation Let's consider the example of blockchain bridges. Many bridges supporting various Layer 1 and Layer 2 networks have substantial total value locked (TVL) and bridged volumes. So, what unique value must a new bridge bring to the table to succeed? Always consider the current saturation of the market and whether there's room for the new project.

6. Entry barrier Lastly, even when a project presents a novel concept, the ease with which competitors can replicate it matters. Could an already established project build the same thing, leveraging their existing products and community to overtake the new one? Does the project under evaluation possess technical or intellectual property that competitors would find hard to duplicate? These are key questions when considering the project's potential.

Understanding the current status of a project is crucial when assessing its likelihood of completion. Both the amount of time already invested in development and the project roadmap, which outlines the estimated time to release, play significant roles in this evaluation.

1. Stage of the product Investing in a product that's already finished and launched at an early stage is ideal, as it greatly minimizes the risk of the team burning through funding without producing a viable product. However, this isn't always possible. You may come across projects at various stages: concept, proof of concept, MVP (minimum viable product), Alpha testing, and finally, mainnet release. The further along a project is in this development timeline, the lower the risk of an unsuccessful outcome.

2. Project roadmap A team should have a clear vision and defined milestones to successfully launch their product. Assess whether their timeline is realistic and consider if the team is likely to delay the product's release.

3. Security threats There are numerous potential security threats to any project, varying across different fields. Consider potential issues with their security protocols, reliance on their own price feeds instead of industry standards like Chainlink, and their approach to smart contract auditing. Examine how the team manages its funds, ensuring they use secure methods such as multisig wallets or hardware wallets and avoid centralized management by a single founder.

4. UI / UX quality / user experience A project's branding extends to its user interface and user experience. High-quality presentation, website, and social media visuals can lend a sense of professionalism to the project. Testing the product within your community and gathering feedback can also provide valuable insights.

5. Product fit / interest of the market Consider how the product differentiates itself from similar offerings in the market. Does it offer unique features or capabilities that make it stand out? Assess whether there's a genuine market need or demand for what the project offers.

6. Regulatory compliance Regulatory compliance is a significant issue in the crypto space. Ensure the project complies with relevant regulations and consider how potential changes in the regulatory landscape could impact the project. It's crucial for the project to demonstrate a commitment to operating within legal frameworks, as this can protect investors and contribute to its long-term viability.

Evaluating the financial health and sustainability of a project is a fundamental part of the investment decision process. The project team should be able to transparently discuss how they will allocate the raised funds, provide projections of monthly spending, and detail their strategies to become profitable.

1. Monthly spendings As an investor, you should be interested in the project's monthly spending to understand their burn rate and runway. You need to ensure the team isn't excessively spending on themselves, which could potentially deplete the investors' funds and jeopardize the project's success. Gain clarity on what constitutes their burn rate and how their expenses are likely to evolve in the future.

2. Usage of raised funds The project should clearly articulate how it intends to utilize the raised funds. This could include covering salaries, marketing promotions, expansion of the project with new hires, and more. A well-planned and justified allocation of funds speaks volumes about the team's financial discipline and commitment to the project's success.

3. Reaching sustainability Every project should have a concrete plan and timeline to achieve financial sustainability, where it can cover all necessary costs and generate profits. In the context of DeFi protocols, for example, sustainability might be reached once a specific average daily trading volume is achieved, which would generate enough fees to cover costs. If the team is spending $100k per month and charges a 0.2% fee on every trade, they would need a monthly trading volume of $50 million to break even. Does this seem achievable? Are there other potential revenue streams that the project could tap into in the future? All these aspects require careful consideration during the investment evaluation process.

4. Growth metrics and projections What growth metrics are the team tracking, and what projections have they provided? Key performance indicators like user acquisition costs, customer lifetime value, active users, transaction volumes, etc., could offer insights into the project's future trajectory.

Many projects tend to build on ecosystems that are probably not going to be alive in another couple of years, are building solutions that rely on third parties, or are not efficient in coding, which leads to mistakes in smart contracts that could be exploited.

1. Ecosystem In this rapidly evolving blockchain space, many teams build on trending or hyped ecosystems that might not stand the test of time. You need to ensure that the project is built on a stable, reliable, and widely adopted chain that has a good chance of remaining viable in the years to come.

2. Tech risks Every project has its own set of technical risks. It might involve dependencies on third-party systems, data integrity issues, inefficient code, and more. Understanding these risks and how the team plans to mitigate them is crucial.

3. Documentation Detailed and accurate technical documentation is a sign of a team that takes their development process seriously. This documentation should be accessible for review, providing insight into their approach, coding practices, and complexity of the system.

4. Future tech development Try to understand the project's technical roadmap. What future developments are planned? Are there any upgrades, new features, or other significant changes on the horizon that could impact the project's success?

5. Codebase Quality While you may not be able to review the codebase personally, assessing its quality is still possible. Has the project been audited by a well-known third-party firm? Have there been any significant issues, such as bugs, security vulnerabilities, or exploits, in the past?

Our analysis and research comes to the final evaluation. This stage is crucial and will invariably be influenced by the comprehensive understanding you've gained of the project. While early-stage investments come with high risks, the prospective rewards can be just as significant. This step requires a careful balancing act, understanding whether the risk/reward ratio is advantageous. It may occur that despite numerous aspects being less than ideal about the project, there could be compelling factors that lean you towards investing. These could be a novel solution to a significant problem, potential for unprecedented growth, or an extremely talented team, among other factors. This necessitates a step back, consolidation of your findings, formulation of critical questions, and confrontation of concerns with the team. Post this, the process of reevaluation must take place, leading to an investment decision.

1. Positives Enumerate all the positive aspects of the project that stand out to you. This could include innovative solutions, strong team, unique features, etc.

2. Negatives Identify and list all the negative aspects and potential risks that could be associated with the project. This could include competition, technical risks, regulatory hurdles, etc.

3. Investment Rationale Based on your assessment of the pros and cons, assign a score to the project on a scale of 0 to 100. You could devise a bespoke method to evaluate and weigh each factor. Formulate a cogent and persuasive justification for the investment in the project. This should highlight potential returns, strategic fit, and other relevant considerations.

4. Investment amount Evaluate the size of your investment in relation to your total net worth or fund size. For instance, if your fund has $10 million in assets under management (AUM), investing amounts like $50,000 may not be practical, as it would necessitate finding 200 such viable investment opportunities. Therefore, it's crucial to determine the investment size that would justify the potential risk and reward of the project.