I focus on the DTC/B2C/B2B2C/Consumer brands startups vertical because my entire professional background has been exclusively in this vertical, which has given me significant experience that I think can translate to identifying investment prospects.
There is linear growth and exponential growth. I focus on exponential growth opportunities because they have the potential to deliver outsize returns in the coming years versus linear growth opportunities.
There is blockchain technology, with the major sub-categories including web3, infrastructure, DeFi and metaverse, which are all considered exponential growth categories.
Web3 has generally emerged as the term to describe consumer applications of blockchain technology that are manifesting as the next iteration of the internet. More about web1 vs web2 vs web3 can be found at https://eddiesoehnel.com/web3-for-consumer-brands/
To draw parallels to web2, think of Facebook/Meta, Twitter, Amazon, Uber, Spotify, Reddit, etc. These companies are consumer focused apps that got their start in the nascent stages of web2 and went on to deliver outsized investment returns. We are in the nascent stages of web3 and I believe we will see the rise of web3 companies that will mirror the reach and size of these web2 examples.
There are other exponential growth categories including AI/ML, robotics, electrification, 3D printing and genome sequencing. But investing in blockchain as opposed to these other exponential growth categories is different in that it is giving small investors like me the potential to invest in high quality prospects.
The most difficult aspect of traditional startup investing is access to high quality prospects. There is so much money and A-list investment groups that it is impossible to get access. I am not an A-list investor, nor even a B, C, D-list, etc. I am a no-list investor, which prevents me from access to good quality, even mediocre quality prospects.
But blockchain investing is different because many startups grow in the open with active participation from regular people like me. There is a tendency to reward this participation, which generally manifests when the project releases an initial coin offering (ICO) to its early supporters. There may be opportunities to invest before ICO in earlier rounds, too.
For me, web3 might afford the best investment opportunities because it is consumer focused apps with exponential growth potential that could offer people like me access to high quality prospects.
Web3 startups tend to release their projects in stages: testnet is considered an alpha release and devnet is considered a beta release, with both processing test transactions only and not on primary public blockchains. Mainnet is considering its public release that is actively processing transactions on-chain. It is best to ID a project in the testnet or earlier stages to get involved with them and support them.