Beyond the Proposal: Why Founder Due Diligence Matters in Web3 Grants

General
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I want to share a personal lesson and raise a broader question for Web3 ecosystems:

When evaluating grant proposals, how much attention should we give to the founders behind the proposal, not only the idea itself?

Recently, I was involved with an early-stage Web3 project that submitted a proposal to the Rootstock ecosystem.

The proposal itself looked ambitious:

  • ecosystem growth initiatives
  • developer/community expansion
  • partnerships
  • large-scale adoption goals

At first glance, it represented the kind of vision many ecosystems want to support.

However, my experience working closely with early-stage teams made me realize that a strong proposal does not always equal a strong execution capability.

For grant programs, especially those funding early-stage companies, I believe there are several important factors to consider.

1. Founder background matters as much as the proposal

A great idea can fail because of execution.

Before approving ecosystem funding, it may be worth evaluating:

  • What has the founder built before?
  • Have previous teams successfully delivered?
  • How were employees, contributors, and partners treated?
  • Does the founder have a history of transparent communication during difficult periods?

In Web3, reputation is often built around products and communities.

But execution depends heavily on the people behind them.

2. Be careful with proposals that promise everything from day one

One pattern I have seen repeatedly:

The proposal starts with a very large vision:

  • massive ecosystem growth
  • hundreds of integrations
  • global expansion
  • large user acquisition

The ambition sounds exciting. But early-stage execution usually happens step by step.

A healthier approach is often:

  • clear milestones
  • measurable deliverables
  • transparent progress updates
  • smaller experiments before scaling

A proposal should not only answer:

“What could this become?”

It should also answer:

“What can this team realistically deliver in the next 3-6 months?”

3. Funding accountability should include operational responsibility

Grant programs usually evaluate:

  • technical capability
  • ecosystem impact
  • milestones

But another question may deserve more attention:

Can this team responsibly operate as an organization?

Because behind every project are real people:

  • employees
  • contractors
  • contributors
  • community members

When a project fails operationally, it does not only affect the ecosystem treasury.

It also affects the people who contributed their time and effort.

My personal lesson as a Web3 contributor

This experience also changed how I evaluate opportunities.

Before joining an early-stage Web3 company, I would now spend more time checking:

  • founder history
  • previous team experiences
  • company structure
  • payment reliability
  • operational transparency

A roadmap can be impressive.

A pitch deck can be convincing.

But ultimately, execution comes from people.

I believe Web3 ecosystems need ambitious builders.

But supporting ambitious builders also requires strong due diligence.

Grant funding should not only ask:

“Is this idea valuable?”

It should also ask:

“Is this team capable of delivering it responsibly?”

I hope this discussion can help improve how ecosystems evaluate early-stage teams and protect both treasury funds and contributors who support these projects.

For contributors joining early-stage Web3 projects, consider requesting milestone-based payments, escrow mechanisms, or shorter payment cycles instead of relying only on future promises.

Related Rootstock proposal:

2 Likes
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So true!!

More than once I’ve worked or gotten to know the insides of companies that looked great from the outside, had very sound business propositions, team and proper funding, but were complete and utterly disfunctional, and it was clear the executives were not and will never be fit to accomplish success in the long term. Years and years pass, 5+ years, and growth is very slow or non existant.

I’ve seen the opposite as well. Companies with a product and/or market timing I did not believe in myself, but founders could simply inspire people and funcion in a high productivity manner and cut or pivot through challenges the market would throw at them. It feels like success is just a matter of time, until the right opportunity comes along and is seized.

It gets more complicated as sometimes it’s much more nuanced. The skills necessary to take a bootstrapped startup off the ground are different from those needed to manage a sizable company, team, maintain order and proper governance.
Sometimes fouders can put a lot of effort, grit, sweat, tears, blood, and achieve success for 1-2 years, but don’t have proper organization and managment skills, necessary to manage a number of leaders, motivate and inspire people, retain employees, organize internal knowledge and information, create processes, etc.

In the end, I think for the evaluator, VC, delegate, etc, actual years (decades) of experience with people and companies, having seen from the inside what sucess and failure looks like, counts a lot into being more able to read through founders with a limited number of interactions.

I totally agree assessing the founders is a must, as the spreadsheets only tell half of the story.

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Muchos fundadores son builders primerizos. Si la evaluación del historial personal tiene demasiado peso, podríamos terminar favoreciendo únicamente a equipos ya consolidados y cerrar la puerta a nuevos emprendedores que, aunque no tengan un historial extenso, sí pueden aportar innovación al ecosistema.

Además, el post parte de una experiencia personal negativa, pero no presenta evidencia concreta sobre el proyecto al que hace referencia. Eso hace difícil extraer una conclusión general. La gobernanza debería basarse en criterios objetivos y verificables, evitando que experiencias individuales se conviertan en un precedente para evaluar futuras propuestas.

También distinguiría entre evaluar la capacidad de ejecución y juzgar la reputación personal. La primera puede medirse mediante entregables anteriores, auditorías, productos publicados, contribuciones open source, referencias técnicas o cumplimiento de hitos. La segunda puede ser mucho más subjetiva y abrir la puerta a sesgos.

Mi visión

Personalmente creo que la mejor protección para una DAO no es rechazar propuestas porque el fundador tenga poca experiencia, sino diseñar un programa de grants donde el riesgo esté controlado desde el principio.

Por ejemplo:

liberar fondos únicamente por hitos verificables;
exigir reportes públicos y métricas objetivas;
definir KPIs que puedan comprobarse on-chain cuando sea posible;
establecer mecanismos claros para suspender el financiamiento si los hitos no se cumplen.

De esa manera, incluso un equipo nuevo tiene la oportunidad de demostrar su capacidad, mientras que el tesoro de la DAO permanece protegido.

En definitiva, considero que la due diligence sobre el equipo es importante y debe formar parte de la evaluación, pero no debería sustituir una buena estructura de gobernanza basada en evidencia, transparencia y financiación condicionada al cumplimiento de resultados verificables.

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We agree with this. If there is a prior reputation and background, it should certainly be evaluated to determine whether the track record was successful or not. A negative track record can serve as a warning, and a positive track record can help build trust. However, if the team has no prior experience because it is a new team doing its first projects, that should not be reason for rejection.