How to measure the overall strength of Web3 venture capital funds

In the last cycle, Web3 VCs have evolved into a complex and differentiated field. Venture capital funds around the world are starting to pour into Web3, including traditional value-driven funds, corporate venture capital CVC, DAO Ventures, venture capital divisions and equity funds of world-class exchanges and trading companies…

A year ago, Wu Blockchain made a detailed ranking of the crypto venture capital space, with many “diamond hands” and high-yield crypto funds. This ranking also shows us that as the dynamics of the fund investment market evolve, so do investment funds and participants.

This article shares some of the factors worth considering when analyzing all aspects of Web3 venture capital firms and related investments, including portfolios, competitive advantages, platform strategies, community, and reputation.

Evaluation system

Ranking in such a liquid and dynamic market is very challenging, and the lack of accurate data basis is one of the main reasons, and a fund may cause a fundamental change in its ranking because of a single decision. In a world where the Fed rules everything, the past 24 months have been an era of investment in which economic policy drives prosperity. In this day and age, capital is increasingly a means of competition, and top companies must invest in unique ways to gain a place in the competition.

The following data is obtained from Crunchbase:

  • Total investment: The number of investment projects since the launch of the first fund, with a weight of 7/10
  • Lead rounds: Number of investments as the primary lead investor, weight: 8/10
  • Number of investments in 2022: Number of investment transactions completed in 2022, weight: 7.5/10
  • Unicorns: The number of unicorns (valued at >$1 billion) in the fund’s portfolio, weight: 9/10
  • Diversity: Investment in women and minorities to start or lead companies, weight: 4/10
  • Notable Investments: Investments in well-known Web3 and crypto companies, weight: 3/10

Unicorn Hit Rate: Measures the number of unicorns in the portfolio as a percentage of the fund’s total investment, weight: 9.5/10

  • Unicorn / Total Investment = UHR, Note: The Fund may have made multiple rounds of investments in the same unicorn

Platform score, weight: 9.5/10

Assess whether the fund provides actual post-investment support to the portfolio companies through platform teams or strategies, including protocol design, development of token economics or white papers, technical support, marketing strategies, talent acquisition, business development, event operations, etc.

Community score, weight: 7.5/10

The ability to measure unique importance to Web3 is community operations, including fund design, community management, and expansion. Whether it’s self-supporting as a fund or helping its portfolio companies, it needs to look at its research output capabilities, social media reach, number of podcasts, meeting groups, Twitter Sapce quality, and more. We refer to the quantity, quality and scope of events held by these communities, and finalize the scores through social and traditional media resources and channels such as the Fund’s website.

Reputation score, weight: 6.5/10

Measure the fund’s reputation in the media, its builders and founders, and the broader Web3 community, based on public sentiment from social and traditional media sources. Also reference the consumer-centric products, platforms and protocols they invest in, interact with and deliver the infrastructure.

Non-crypto-native fund, weight: 5/10

Native funds in the Web3 or crypto space will get more weight. Based on recent crypto investment activity assessments, crypto-native funds will have a clear advantage in terms of the number of transactions, lead rounds, and the number of unicorns.

Female Partner: Data from the team introduction of each fund website, weight: 5/10

Negative news: Data from the open web and social media, related to reputation scores, weight: 8/10

Dollars raised: Fundraising data from Crunchbase and Messari (formerly Dove Metrics), weight: 4/10

Year of foundation: Highlight the viability of the fund in multiple cycles, weight: 2/10

The total score is combined with the above weighted indicators, and the score is scored on a scale of 100 points, as detailed in the list.

The World’s Most Influential Web3 VC list


Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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