This article is released by @caseykcaruso in her twitter.

1/ Founder References

In the early stage, the most constant variable in the equation is often team. Find people you respect who know the founders and ask about their strengths, weaknesses, etc.

Ask yourself: Would I work with this person? If yes, that's bullish.

2/ Size the Opportunity

Think about market size today and theorize how big it could become. Be generous with your predictions because crypto is one of the fastest growing industries in the world. Familiarize yourself with memetics and the theory of reflexivity.

3/ Use The Product 🤯

If there’s a product, use it. While painfully obvious, this step is often skipped. It will crystallize the use case, value proposition and product offering. It's also nice for the founder to have investors who understand and use their product.

4/ Customer Calls

Talk to users. Leverage @discord to do so quickly. Ask: How did you hear about the product? What were you using before? How does it compare to alternatives? How do you think about ROI & value? What would make you churn? NPS? Look for organic & durable usage.

5/ Traction Analysis

In web2, company data is private. In web3, a lot of project data is on-chain and accessible through products like @DuneAnalytics. Utilize on-chain data. Look for growth rates of top KPIs (i.e. volume, TVL, wallets). Compare MoM or QoQ growth to competitors.

6/ Ask "Why Now"

Many ideas in crypto have been tried before. Think about how many identity products we’ve seen. Timing is key. Try to figure out why past attempts have failed. Consider why now is different e.g. the rise of alt L1s and rotation of capital from DeFi to NFTs.

7/ Community Review

Understanding a community’s sentiment, quality and durability is crucial. Join the community’s @discord and @telegram to assess the quality of members. Use twitteraudit.com to decipher what % of Twitter followers are bots vs real humans. Humans > bots

8/ Tokens and Value Accrual

If there's a token, take time to understand the high level token mechanics. The key consideration is how the token will capture value. Assess lockups, issuance rate, release schedule, faucets & sinks, growth loops, memes, etc.

9/ Competitive Landscaping

Figure out who the top competitors are and how this project is different. Think about their moat today and how that scales. If they aren't the market leader, develop a thesis on why they'll become the leader or why it's not a winner take all market.

10/ Returns Analysis

According to @MessariCrypto, there are only 80 assets with a Y2050 marketcap (i.e. marketcap of asset accounting for known issuance until 2050) of > $1B. Make sure the math makes sense.

Bonus/ Be willing to skip steps 1 -> 10

Sometimes decisions need to be made faster than you’d like. Be willing to flex on the diligence process, recognizing there’s always more diligence that could be done. Be smart with your time and prioritize. Don't discount your intuition.

tl;dr - Web3 early-stage investing demands new mental models and criteria compared to Web2. If you're an angel evaluating opportunities, feel free to use this checklist if helpful: tinyurl.com/yw9nsje5

EaEarly Stage Crypto Angel Investing Diligence Checklist: • Founder References + Research • Size the Opportunity • Use the Product • Customer Calls • Traction Analysis • Ask “Why Now” • Community Review • Tokens & Value Accrual • Competitive Landscaping • Returns Analysis • Flexibility & prioritization with steps 1 -> 10