Updated Due Diligence Criteria
Updated Due Diligence Criteria
※Updated on February 2nd
How We Analyse Projects
DAOLaunch, focus adding value on startups and lead them for success, below is the criteria that our team members look for when a project applies for fundraising at DAOLaunch. Firstly, we take a look at the initial application and automatically eliminate all projects that are missing the core required information such as a website or whitepaper. Next, we dig deeper and rating each criteria element.
1. Team and Leadership
Crypto market is still new field and quite competitive market, requires entrepreneur being flexibility and always eager to success.
Team and founder Leadership is most important element for DD, we assess the teams how experience teams and background, and eager to success as well as their vision and practical approach to make it achieve.
2. Marketing and community
Marketing, Content, and Community. Next, we dig deeper into the content on the website, whitepaper, social channels, and blog to assess the overall marketing of the project. We look at these core channels to determine the quality of information available and overall professionalism.
Certain marketing criteria stand out among applications. We look for engaged existing communities across Telegram, Discord, Twitter, etc. to ensure there is a primed group of passionate users. We also look for an updated and detailed roadmap; transparency with the community is critical for success.
Some patterns that hurt a project’s chances include dead or broken channels, incongruent or misleading information, an outsized presence of bots and spam accounts, and low engagement with the community.
3. Vision and Concept
Next, we take a deeper look at the technology, the product roadmap, and the execution plan.
Innovation. If the project is something that has been done many times, we tend to reject it unless we have valid reasons to think that it could be a competitor to market leaders due to, for example, a particularly experienced team. We are looking for projects that push the mission forward. In other words, projects that add a missing piece of infrastructure or tooling, aid the vision of a decentralized world or open up brand new opportunities for the space. Projects that are rejected on the grounds of insufficient innovation tend to be copy-and-paste of existing projects without an edge that situates them as a serious market competitor.
Practicality. This a tremendous number of novel and unique ideas out there for blockchain technology. However, if the idea has a too-distant product-market fit or an unrealistic vision, we will consider rejecting the project based on the amount of time we could anticipate it finding traction in the market. Part of this criteria is a proven track record and/or demand. If product-market fit already exists, the chances of approval are higher.
4. Development and Feasibility
Development progress. We accept projects at all stages of development. However, all projects must be able to show alignment between their external roadmap/communications and their internal development progress. If we have reason to believe the project isn’t set up to deliver on its development promises to the ecosystem, we are less likely to move forward.
A development criterion that hurts a project’s chances is an incongruent roadmap and Github. If a public roadmap promises releases but those releases are not reflected in the company’s Github, we are less likely to approve the project. As part of the selection process, DAOLaunch will request access to projects’ Githubs in order to analyze development progress firsthand.
Security, we want to ensure buyers on DAOLaunch have confidence in the security of the projects. An existing audit from a security firm is a strong asset in favor of a project’s acceptance.
At DAOLaunch, we want to make sure that the tokenomics of the token is fair to all parties. Some factors we look at for tokenomics are vesting periods and lockups, allocation, token utility.
For vesting periods and lockups we find steady and gradual vesting periods create stability and stronger community engagement. They should be attractive to retail investors and ensure there are no VC dumps.
For Allocation and Post Unlocks, we like to see fair and reasonable ratios of public to private token allocation. If an overwhelming percentage of tokens will be allocated to VC’s and private sale investors, we will reconsider the token’s stability and community trust. We want to ensure projects engender maximum token decentralization to prevent unnecessary dumps and rug pulls
For Token Utility, DAOLaunch believes in a mutual relationship between the token, the project and the community. Therefore, the project should have a strong product with efficient fundamentals to drive adoption in the blockchain space.
DAOLaunch aims to create an open and inclusive competitive environment for startup investment- the Decentralized Venture Capital concept.
DAOLaunch offers retail investors preferential investment conditions depending on their investment performance recorded on the blockchain. Recorded investments are not editable, as all negotiations are all on-chain. DAOLaunch investors can brand themselves as Decentralized Venture Capitalists and much like traditional VCs, they can negotiate more favorable investment terms.
DAOLaunch aims to change the structure of shady behind-closed-door investment deals to an open and more competitive deal structure that takes place on the blockchain. This will drastically shake up the startup industry.