How to Find Web3 Deal-Flow
Steve Glaveski
Media x Startups | Founder of Collective Campus | Founder of SonicBoom | AFR100 Fast Starter | Wiley author | HBR contributor | Future Squared podcast host | SXSW speaker | ex-Macquarie, EY & KPMG ??
21 ways to find and create web3 deal-flow
The total market cap of crypto has soared from?US$145 billion to over US$2 trillion?in the past two years.
Numerous web2 and crypto-native venture funds have entered the space, making billions available for investment.
But despite the rapid growth of the sector, it is still tiny relative to web2.
Just 30,000 of the world’s 30-odd million active monthly software developers currently work in web3. That’s just 0.1%.
This has prompted numerous networks and protocols to establish ecosystem development funds. In fact, in the 12 months to May of 2022, over US$9.2 billion was poured into such funds.
Source: Metarise DAO
Money doesn’t seem to be an issue, but finding worthwhile talent and projects to invest in is another story.
In this article, we break down how to both find existing and create new web3 deal flow.
How to find existing web3 deal flow
1. GitHub Repositories
Developer platforms such as?GitHub,?GitCoin, and?BitBucket?can be used to virtually find every blockchain project under the sun.
In fact, a quick search in GitHub tells us there are over 130,000 blockchain-related code repositories or projects. We can sort results by project popularity, using filters such as how many times a project has been forked or starred.
From the repository page, we can find out who key contributors are, and get in touch.
If a project has a lot of activity, updates and stars but hasn’t gone public yet, launched a token, or has a relatively small market cap, it could be an opportunity worth exploring.
2. Partnering with investment DAOs
As I wrote in?How Web3 Venture Investing Differs From Web2,?web3 projects typically reserve no more than 20–25% of their entire token supply for investors, so individual investors typically take small single-digit stakes and need to collaborate with other investors.
As such, partnering with investment DAOs such as?GlobalCoinResearch?can help you tap into vetted web3 deal-flow and co-investment opportunities. Dealflow referrals are typically a two-way street, so you get what you give.
3. Partnering with venture funds, angels, and angel syndicates
As noted in 2, web3 investing is more collaborative, so aside from investment DAOs, partnerships with other crypto funds and investors are both a necessity and can be a source of deal-flow.
4. Discord
Discord is the online home of web3 communities, and it is where you can build relationships, connect with founders and contributors of projects, and get across activity and potential deal flow. However, there are thousands of Discord servers, and many of them can be quite noisy, but if you’re strategic about it this can be a source of investment opportunities.
mple, suppose I am looking to invest in web3 startups in Australia. In that case, I might join and contribute to a server such as?ETH Daounder, which is populated by active founders and contributors in the region.
5. Content
As with web2 deal-flow, brand and reputation go a long way. Fortunately, today permissionless tactics such as content creation can help you build a brand around your work and attract deal flow.
This includes but isn’t limited to tweets, blogs, podcasts, videos, and reports, on topics that are both of interest to your target audience (web3 founders and teams) as well as position you as a thought leader that can deliver serious value to projects — by way of coaching and mentorship, access to networks, differentiated insights and perspectives, sector-specific content, or capital.
You can go a step further and be super targeted by inviting founders and potential partners onto your podcast or referencing them in your blog articles. Even in web3, relationships are (almost) everything.
Since launching?The Metarise Podcast?earlier this year, I’ve had the pleasure of having founders on from?The Sandbox,?CryptoVoxels,?RFOX,?Krause House, and more.
6. Social engagement
Aside from Discord,?Twitter?is home to the broader crypto sphere. Posting regular insightful tweets and engaging with the tweets of crypto influencers, potential partners, and founders of promising web3 projects is a low-cost way to build your brand, relationships, and receive deal-flow referrals.
Use a tool like?BuzzSumo?to make a list of crypto influencers on Twitter to start with, and begin engaging with their posts on a daily basis — preferably in a short window of, say, 30 minutes, instead of sporadically throughout the day which can be toxic for productivity, focus, and mental health.
7. Networking events
As with web2 investing, industry events can be a great way to meet potential founders and deal-flow partners — but you can’t leave it all to serendipity.
First, pick the?right?events based on your mandate (geography, web3 domain you’re investing in and so on, event popularity, and attendee numbers)
Second, most conferences offer attendee lists and networking modules to ticket-holders. Review the list for people you want to meet and reach out to them prior to the conference or event to schedule a meeting or coffee.
Applying this approach at conferences and festivals such as?SXSW,?Permissionless,?Consensus,?ETH Denver, and others can be a fantastic way to accelerate your network-building efforts.
8. Direct outreach
Aside from platforms like GitHub,?AngelList?and?Crunchbase?empower you to find and filter web3 projects.
For example, a simple search for ‘blockchain’ gives me over 14,000 results in Crunchbase, from which I can find contact details and team profiles, existing investors (if any), and more. From here, I can reach out to desired parties via email, Twitter,?Telegram, or?LinkedIn —?and make my job easier with tools like?MixMax,?LeadIQ, and?LinkedHelper.
Speaking of social media, Twitter and LinkedIn can both be a source of web3 founders and projects.
9. Partnering with service providers
Whenever it comes to referral partnerships of any kind, ask this question: “where does my target audience go before and after me?”
In the case of a web3 founder or team, before and after they seek out investment, they might work with recruiters and job boards, accountants, lawyers, web3 media, coding, business, and web3 schools and bootcamps such as?General Assembly,?RabbitHole, and platforms such as?Coinvise?or?MintGate.
These can all become valuable referrers of deal flow.
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10. Advertising
Consider advertising your services or, more appropriately, your high-quality content (see 5) to the right audience via?Facebook,?Google, Twitter, or web3-friendly podcasts and events.
Speaking of event advertising, SXSW this year was awash with web3 posters and flyers.
11. Be My Guest
Guest on prominent podcasts and contribute posts to notable publications that have a large and relevant audience. For example, swinging an appearance on a podcast such as Bankless could be huge for a crypto investor looking to become more well-known to founders.
Similarly, appearing on a podcast such as 20:VC or Venture Unlocked could help crypto investors strengthen their brand amongst the VC community and open the door to partnerships.
Oh, and if you want to be my guest on?The Metarise Podcast,?email me here.
12. Press Release
Writing and distributing a press release to relevant and high profile web3 media to let it be known that a) you have an X$ crypto fund, or b) that you have made an investment in a web3 startup, can both give your brand access to thousands of relevant eyeballs, and generate inbound inquiries.
13. Portfolio Referrals
Startup founders are a resourceful bunch and tend to be avid networkers — it’s almost central to their success. As such, they are likely to know many other founders working on projects that intersect with their own. These could be potential investment opportunities. Ask your portfolio investments for warm introductions to any founders or teams that they think are onto something.
14. Boots on the Ground
Serendipity isn’t a strategy you should rest your hat on, but it can help. There’s a reason why Silicon Valley has been so successful in churning out unicorns for so long. Its high concentration of entrepreneurs and capital allocators creates the perfect conditions for serendipity to thrive, and chance encounters to blossom into something much greater.
So if you’re mandate is to invest in, say, London, having some boots on the ground in areas such as Silicon Roundabout, and setting up shop in a local?WeWork?or thriving startup coworking space, could result in new connections and new investment opportunities.
15. Events
Of course, events on topics of interest to your target audience — how to pitch, tokenomics design, utility NFTs, and so on — can help to attract founders, and get them into your funnel.
How to create NEW web3 deal flow
As indicated at the top of the article, web3 is still in its infancy and infinitesimally small compared to web2. Still, with web3 poised to grow at mid-double digits CAGR through to 2030, lots of talent is expected to enter the space, and with it, new projects and investment opportunities.
So how can you be there first, waiting with a cheque in hand, for promising web3 founders and teams?
16. Partner with ecosystem development funds
Networks and protocols are desperate for new talent and projects. Whether it’s?Avalanche, Polygon, Algorand, or even?TRON, they all have significant development funds and grants available for new founders. As such, they have direct access to new projects. As such, building relationships with such protocols and funds can give you direct access to new deal flow.
17. Partner with existing incubator DAOs and hackathons
While the web3 accelerator space is still quite young, there are a number of incubator DAOs such as Seed Club who are tasked with pumping out new projects. You could be an investment partner, or offer to be a coach, mentor, or judge at demo days.
18. Run a web3 accelerator or hackathon
Instead of just partner with other accelerators, you could consider running your own. That’s what we’re doing at?Metarise. Having run accelerators for over five years with?Collective Campus, we know that the typical program can receive upwards of 300 applications, of which we might select 10 to participate in a program.
Running programs give you lots of industry insights, new relationships and helps you find the needle in the haystack before others do. This is especially true if investing?after?completing a program, at which point you have much more project data points to make decisions with.
It can also be a great way to take tiny stakes in an extensive and diversified portfolio by exchanging your accelerator’s services for X number of incubated startup tokens.
Of note, hackathons, unlike accelerators, can lead to the creation of new projects and investment opportunities.
19. Build a tokenized community
In addition to our accelerator and true to the ethos of web3, we’re building a DAO where all accelerator contributors who hold our native tokens — be they mentors, coaches, ecosystem funds, startups, advisors — share in the upside of all of our incubated startup tokens, accelerator profits, and passive income from staking incubated startup tokens.
This incentives everybody to identify and refer deal flow our way, not only that but it gives startups additional incentive to participate in our programs — kind of like web2 founders do at?The Founder Institute.
20. GitHub developer search
As with finding projects on GitCoin, you can also find blockchain developers and filter them based on how impactful and popular their contributions are.
A quick search for ‘blockchain’ users reveals over 25,000 developers, from which we can find relevant developers and reach out — particularly if we are running an accelerator that aligns with the developer’s interests.
21. Signals
Past success often predicts future success. Such was the case with Kevin Rose’s Moonbirds NFT project.
And with so many web2 founders jumping ship to web3, what if we could find reputable web2 converts to work with?
Well, we can try using signals to direct our outreach.
Signals might include:
But it’s not just founders. It could be reputable VPs of sales or top tech talent jumping ship to start their own projects.
Bonus Round
Now that you’ve done the hard work to get the attention of your target audience / founders / teams / partners — make sure you keep it.
Get people onto your mailing list, and keep them engaged with regular — but not too regular — content and insights, until such time that it is right to have a conversation and engage.
These are just some of the many potential ways you might go about finding and creating new deal flow in the world of web3.
Got any others? Leave a comment below!