When considering Web3 partnerships, the background and perspective of the evaluator may lead to blind spots. Traditional companies and investors may k
When considering Web3 partnerships, the background and perspective of the evaluator may lead to blind spots. Traditional companies and investors may know the business fundamentals and financial metrics to examine but be unclear on industry-specific “must-haves” such as necessary tech capabilities and a committed fan base. Industry insiders, on the other hand, may be impressed by a potential partner’s community presence and the features they promote but overlook the health of the financial and advisory foundations.
To ensure a profitable partnership that brings value to both parties and to end-users, it’s essential to examine both the big picture and the telling details. Below, 17 members of Cointelegraph Innovation Circle share tips for companies and individuals engaged in evaluating a potential Web3 partnership.
Any shortcomings you may inherit
Too often, companies will rush to partner in the hopes of doubling their chances of success. However, industry leaders should remember that their company also inherits any potential shortcomings in these scenarios. That’s why it’s important to conduct a full quality assessment prior to integrating any new solution. Blowback from a poorly vetted partner can do more damage than market volatility. – Oleksandr Lutskevych, CEX.IO
On-chain activity
When considering Web3 partnerships, companies should evaluate potential partners’ technical expertise, security measures and track record. Additionally, analyzing their on-chain activity can reveal the actual product or dApp engagement, allowing companies to understand the partnership’s benefits better and make informed decisions. – Tomer Warschauer Nuni, Kryptomon
Their fan base and community
Investigate the reputation and track record of the potential partner in depth, as well as their participation in the Web3 community. Do they have a substantial fan base and active community? What is their relationship with their users and supporters? Community size, participation, reputation and openness all matter — it’s particularly important that they possess a collaborative mindset. – Theo Sastre-Garau, NFTevening
Input from others who have interacted with them
It’s all about the founders. Companies in Web3 often operate with very little oversight and generally have no board of directors consisting of investors. That means that due diligence becomes not just a question of online intelligence, but human intelligence gleaned from partners and industry players who may have interacted with that company in the past. – Jason Fernandes, AdLunam Inc.
The actual value being accrued
Partnerships have to be meaningful and tied to usage or customers. When doing your due diligence, make sure that it’s not simply an empty partnership announcement to drive up price speculation. Still more important, ensure it is actually accruing value to the base protocol or project (that is, creating free cash flow). Quickly learn to distinguish between price-speculating partnerships and value-creating partnerships. – Nitin Kumar, zblocks
Their track record and reputation
Make sure your potential partners have a good track record, a good reputation, and verifiable qualifications and experience. Talk to them to see if they can answer all your questions and to get a feel for their energy and personality. Also, talk to other people or businesses who have dealt with them in the past to get their feedback. – Sharon Yip, Polygon Advisory Group, LLC
Their long-term vision and the value to your community
When it comes to Web3, community usually comes first in all decisions, including decisions about partnerships. I usually focus on two things while doing due diligence: whether the partner is building something with a long-term vision that we can align with and whether the partnership can bring value to our community. – Cindy Jin, Mintology
How well your team will work with them
While companies should thoroughly research a potential partner’s background and reputation within the Web3 community, it’s just as important to gauge whether your team will work well in this new partnership. Significant differences in opinion, culture, personalities and work ethic are a threat best avoided when your project’s success is at stake. – Sheraz Ahmed, STORM Partners
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Their fundamental business dynamics
When it comes to due diligence, Web3 companies should be treated the same as any other company you’ve considered working with. Their fundamental business dynamics should receive the same level of scrutiny you always give. To create a strong base for a partnership, ensure that their resources, debt, equity, forecasts and various other functions are all consistent with the best interests of potential partners. – Megan Nyvold, BingX
How well (or if) the…
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