If you had invested in Web2 back then, you could’ve made 14X your money.
Let’s say you liked Youtube in 2006. Everyone was talking about it and you had the wild idea to invest in the company. Youtube was owned by Google at that year. Hence, your investment would be in Google. If you had invested let’s say $10,000 back then, they could’ve transformed into a whopping $140,000. That would’ve been quite a good investment as you believed in this particular web2 application. Now the question is, when will it repeat with web3? If so, you ought to know how to invest in web3.
It’s not a question of whether this will repeat. It’s a certainty. Records are always broken. If Google returned a 14X, Tesla later on returned a 40X, and so on.
I am quite confident that you’ve heard of web3. Hence, let’s discuss how to invest in web3 today.
First of all, what do I know about how to invest in web3?
If you are not asking this question, you should. Google is a massive directory of content of which many can’t be trusted. So who am I?
I’m Al Anany, an entrepreneurship consultant in Zurich, Switzerland. Before creating Albusi, I’ve worked with hundreds of clients from Upwork, Fiverr, and other websites. They needed work on preparing their company for investment.
During 2020-2022, the number of clients asking for web3 and crypto projects were increasing massively. Hence, in order for me to help my clients, I needed to understand more about this web3 world.
I am a tech focused consultant, so it wasn’t hard for me to grasp. Yet, if you’re new to this world, this image is to me, the best to describe web3.
It’s the next evolution of the internet. I am assuming you’re not a tech guru, and even if you are, you do not need to know the exact sophisticated details in order to invest in web 3.
When you’re investing in Uber, I am sure you won’t be asking about which programming language they’re using. Yet you need to know some vital points.
Do not confuse cryptocurrency with web 3.
Your neighbour who does not believe in Bitcoin will tell you not to invest in web3. You need to explain to them that this has nothing to do with web3. Cryptocurrency as an asset is a small sub category of the web3 world.
It’s as if you said, this restaurant does not offer card payments, so I won’t invest in it. You didn’t even see the Pizza they’re offering.
Again, it’s the new evolution of the internet. There will be new browsers, messaging apps, and payment methods like cryptocurrency. This has nothing to do with a guy becoming a millionaire because he invested in DOGE coin.
You could be investing in a private company that has a web3 browser, then the price of bitcoin drops massively. This does not necessarily affect your investment whatsoever.
There is no investment that is risk less.
You’ve heard of successful web 2 applications like Youtube and Instagram. But have you heard of Pets.com?
The company raised over $80 million in an IPO, then filed for bankruptcy nine months later. Etoys.com? The company had the stock rise to $84, then filed for bankruptcy around a year later with almost $250 million in debt.
Investing Web 1, 2, 3, 4, or infinity will always come with risks. Diversification could help, but fixing the mentality that this money could be lost is what’s vital.
How to invest in web3 smartly? Diversify.
While you should be consulting your investment advisor before getting into any investment, most known investors agree that diversification is a smart approach for the reason mentioned above. You wouldn’t want to be the person who invested all their money in Pets.com.
Yet, remember that Warren Buffet made most of his money by investing in just a few stocks like Apple, Coca-Cola and Bank of America. But, he could’ve lost all his investment, and he was aware of that.
In the world of web3, there will be winners and losers. Instead of betting randomly, you need to study the companies and preferably diversify your web3 investment amongst them. That’s vital to think about when discussing how to invest in web3.
Meta, Twitter, Amazon, Apple, Netflix, and many others already started investing in web3.
Meta invested in web3 heavily by converting everything they stand for to focus on the metaverse. Other companies like Amazon are focusing on the blockchain technology. Twitter are using NFTs. Everyone is playing a part of the game. However, they’re all having one thing in common.
All these names are investing in web3 and the future. Tell that to your neighbor.
Being a conservative investor is by all means alright, and waiting for big credible companies to be pioneers is a safe and smart approach. So you need to know that they’re already doing that.
How to invest in web3 companies or projects?
There are many ways you could get it started in terms of investment. There is the relatively safe way of investing in a tech company like Apple that believes in web3 and are implementing projects based on that. This could result in quite a good return.
Additionally, there is the unsafe approach, but could revert with high returns. It’s as if you are investing in Facebook when it was just a website with almost no users, or Apple when it was in a garage. It’s risky, but could result in a return like no other.
Private companies are not easy to invest in, and could mismanage your funds and vanish in no time. (Like FTX)
Yet, they are the ones that need investment the most and for that they offer equity which would have phenomenal returns or losses.
Again, I advise you to review your choices with your investment or financial advisor before deciding to invest in a web3 company especially if it were a private one.
Nevertheless, I’ve worked with many web3 companies, and I could be of help to answer your question, “How do I know if this company is legit?”
Finally, here is how to see the red flags in a web3 company.
In this web3 world, many are, unfortunately, entering the market with the hopes of just making money off the hype. For that, you need to do the following process before investing in a web3 company:
Review the product
Never invest in a project without a working product. It’s quite easy to talk. Yet, creating an MVP or a prototype could be a process that is never meant to happen. You do not have to be an expert in web3. Yet, you are capable of testing the product yourself before deciding on how to invest in web3.
There are people in this world who have the mindset of simply just creating an idea and trying to profit from it. They’d create beautiful documents and websites but with no product. Beware of those.
Study the team
I intentionally said study the team rather than just look into the team page. Many fraudsters would prefer not adding their faces to their products. It could be that they are focusing on making a pump and dump. It could be that they’re just not comfortable showcasing their identity and linking it to the company.
In all cases, it is not worth it when that happens. Close the screen immediately and look for another project where you can find the team members on LinkedIn and talk to them.
Why do they need an investment
You need to ask them this question and be convinced of the answer. Many projects and companies do not need your investment. Many others would be looking to invest your money in their project because they are too scared to invest their own. You do not want to be a scapegoat.
Thereby, ask and open your ears quite well when they answer you.
Additionally, how to invest in web3? How about you build your own project?
You can create a web3 blog, or an application that would be valued in millions in ten years or so. For you to do so, you could start with a business plan. Only in the case that you can’t do it yourself, there are some freelance consultants here on Albusi that could help. Here’s an example.
Feel free to shoot me any web3 questions in the comments below and I wish you the best in your upcoming web3 adventure!
Meet The Author Of This Article
I’m Al Anany, the founder and CEO of Albusi.
Writing in the business industry has shifted my mentality toward entrepreneurship. I started on Medium in 2021 and ended up being a Top Writer of more than 4 categories and had my content viewed more than 213k times.
I always have a single goal while writing: focus on entertaining while adding value.
Start your own business. You could build your own Neuralink. If you need some planning documents, I recommend this team.