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Angel Investor Framework

I am not a big time investor by any means. I barely write small checks. I’ve only deployed two checks into web3 companies that I believe in. I would write them (you can find them on my angellist profile) but I dont want the feds to come after me.

I’ve invested next to Balajis Srivinsan, a16z, Coatue, Latitud, On Deck, and EPMT. So i’ve been able to rlearn what a good startup looks like.

Below you’ll find my two mental models and frameworks I use to decide whether or not I want to deploy the little money I have to help a founder achieve their dream 👇

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Pre-Seed x Seed Web2 Companies

First it makes sense to start out with classic early-stage web2 companies (which I have no experience investing in but have friends who have) this is part of their framework plus tony logic so I hope it makes sense)

If you’re pre-seed x seed this is what I am usually looking for:

What’s the vision?

Is it strong and emotional?

Can I get behind it?

What problem are you solving?

Is it real?

How much of a problem is it, how do they fix it now?

Who has this problem? (Who’s your target customer)

Solution

Why does it make sense?

How does it solve this problem?

How does it fit into this users life?

Market

Size of market ( How big is it? how fast is it growing?)

Competition (Is it other young startups, older incumbants, or bigger startups?)

Team

Founder-Market- Fit ( do you have experience in this market?)

Chemistry ( have you worked together? what are the complimentary skills?)

Would I drink a beer with you?

Business Model

What’s your long-term thinking on how this will involve?

Run me through your logic?

Admittedly this should be enough for somebody to take a bet on not only you but also your business. If you’re up-to the challenge then talking about

traction (something meaningful like revenue, retention, or even usage)

unique insights on problem, customer, or market

When on calls with founders this is usually what I am sussing out. A lot of my thinking comes from talking with other founders that are raising from venture, scouting startups for wefunder, and launch house. It’s not perfect but it falls on the thinking of a lot of other angels.

Pre-seed x Seed Web3 Projects

This is the one that you were waiting, huh? So, lets just be clear, if 90% of web2 startups are going to fail, then 98% of web3 startups will fail. The space is so early that thinking about these on a long horizon is totally speculative. Anyway, there’s a really large amount of projects coming up with really smart people, and that’s a bet you should always take.

So this is something that I am constantly refining based on the sectors of web3 - daos, communities, products, etc. For the sake of clarity, I will use my general framework, and edit once it becomes more thought out. Let’s start 👇

Founders

How long have they been in web3?

What are their specialties?

Team

What are their specialties?

Product (plus roadmap)

How focused are you on your core value add?

What else are you building for users?

What’s the onboarding for users like?

Market

What’s their process in developing in the market?

Who else is in the market? Are you partnering with anybody?

How does this affect the overall crypto market?

Community

How do you engage and retain members?

Do you have one? What’s the purpose? Why do people join?

What’s your plan for the community?

The biggest piece here is using the product that you’re possibly going to invest in and lean heavy on Vibes. I’ve found vibes to be the biggest signal in web3.

If you want to invest with me or learn more, email me -

tony@diffusion.me⁠

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