Why is Due Diligence crucial for Web3 Investors?

As an investor in the Web3 space, it’s essential to prioritize due diligence before making any investment decisions. It’s a critical step that ensures you thoroughly review and analyze a project to make informed choices with your hard-earned money.

The due diligence process in Web3 investing encompasses several stages, starting from the pre-revenue stage where the project is implemented with a proof of concept, and includes details on the team and backers.  It then moves on to the pre-token launch stage, which involves reviewing tokenomics and legal aspects.

Finally, the post-launch stage is crucial, as it involves verifying the implemented procedures and assessing the project’s progress after the token launch.

It’s important to note that due diligence could begin at any stage of project development. However, regardless of the stage, there are some factors that investors need to be prepared with before starting each process. This includes the analysis of token price, utility, and distribution.

A detailed analytical report considering the company’s relevant background, including market capitalization and investment rounds, is essential.