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Guide for Startups: Growth Stages in Crypto & Web3

25.01.2026

The Web3 industry often looks like an environment full of fast opportunities. In reality, only a small number of projects manage to go from an idea to a sustainable business. Most startups either get stuck at an early stage or fail to withstand market pressure after a token launch. The reason is rarely the technology itself. In most cases, the problem lies in the lack of a structured understanding of Web3 growth stages and the requirements a project must meet at each phase.

At Cware Labs, we regularly encounter situations where a strong team and an interesting idea do not lead to growth, investment, or scalability. The reason is almost always the same: the project is either doing the wrong things at the wrong time or trying to skip stages that cannot be bypassed without consequences.

This article is an attempt to break down the Web3 startup journey in a clear and practical way. No abstract theory, no motivational clichés, and no illusions. Only a realistic view of Web3 growth stages, based on our experience working with dozens of projects, the expectations of venture funds, and the actual mechanics of the crypto market.

What Growth Stages in Web3 Are and Why They Matter

The growth stages of a Web3 startup are not a formality or a decorative framework for pitch decks. They represent the real development logic of a project, where priorities, success metrics, and expectations from investors, partners, and the market change at every stage.

One of the most common mistakes founders make is treating Web3 as a fast-forward version of a traditional startup. In practice, Web3 does move faster, but this does not eliminate fundamental stages of development. On the contrary, mistakes accumulate more quickly and become significantly more expensive, especially after a Token Generation Event.

Understanding growth stages allows founders to:

Accurately assess the current state of the project.
Avoid wasting resources on actions that bring no value at the current stage.
Speak the same language as investors and understand their objectives.
Prepare for the next stages in advance, rather than reacting after the fact.

At Cware Labs, we use stage-based development as the foundation of all our work with projects – from express scoring to deep acceleration and preparation for TGE.

Why Generic Advice Doesn’t Work in Web3

The industry is full of generic recommendations like “do marketing,” “raise funds,” or “build a community.” The problem is that without tying these actions to a specific growth stage, such advice is either useless or even harmful.

For example:

Marketing without an MVP at an early stage creates empty expectations.
Fundraising without a clear economic model leads to a toxic cap table.
Launching a token without a mature product destroys market trust.

At Cware Labs, we always start by identifying the project’s maturity stage, and only then move on to strategy, marketing, or fundraising.

How We at Cware Labs View Web3 Growth

Over the years, we have arrived at a simple but uncompromising principle: Web3 company growth is not a set of random activities, but a sequence of deliberate decisions.

Internally, at Cware Labs, we divide the project journey into 5 key stages:

Research and Development.
Incubation.
Acceleration.
Token Generation Event.
Post-TGE Growth.

Trying to operate at a future stage without completing the previous one almost always leads to strategic misalignment. A project may look active on the surface while remaining investment-unready or economically unsustainable underneath.

How Growth in Web3 Differs from a Traditional Startup

Despite similar terminology, the Web3 company journey is fundamentally different from Web2. From the very beginning, Web3 development is built within a community-driven environment rather than around a centralized product or corporation. Users are not just customers – they are ecosystem participants who influence growth, decision-making, and the project’s long-term value.

In a traditional startup, a team can spend years focusing solely on the product without considering secondary markets or liquidity. In Web3, this is not an option. Every early-stage decision directly impacts future tokenomics, user behavior, and the project’s investment attractiveness.

Several factors define the key differences in Web3 growth:

The presence of a token is both an economic and reputational instrument.
Continuous exposure to market cycles.
High sensitivity to community trust.
Early attention from investors and speculative capital.

This is why attempting to replicate Web2 growth models without adapting them to the Web3 context almost always leads to failure.

Why Investors Focus on Growth Stages, Not Just the Idea

One of the most common illusions among founders is the belief that a strong idea can compensate for a lack of structure. In practice, venture funds and private investors evaluate not the idea itself, but the project’s level of maturity relative to its current stage.

An investor typically asks several key questions:

Does the team understand where the project currently stands?
Are they taking the right actions for this stage?
Is the project ready for the next growth step?
Which risks have already been mitigated, and which still remain?

This is why two projects with similar products can receive completely different reactions from the market. One may appear “too early,” another “too risky,” and a third “ready to scale.”

At Cware Labs, we often see projects miss investment opportunities not because they are weak, but because they do not align with the expectations of their current growth stage.

Why Founders Should Read This Guide Before Scaling

This article is not a manual on how to quickly raise funds or achieve a x10 after listing. Its purpose is far more practical – to give founders and teams a clear understanding of the logic behind Web3 company growth.

This guide is for you if you:

Are at an early stage and unsure where to focus first.
Are preparing to raise capital and want to speak the same language as venture funds.
Have already gone through TGE and are facing retention and post-launch growth challenges.
Or simply want to objectively assess the current state of your project.

This material will help you align your internal reality with how the market, investors, and the broader ecosystem evaluate Web3 projects. Next, we will systematically break down each growth stage of a Web3 company.

At the end of the article, we will also show how these stages map onto the Cware Labs Scoring System – our internal framework for assessing Web3 project maturity, which we use for due diligence, acceleration, and fundraising preparation.

Stage 1. Research and Development of a Web3 Project

The research and development stage is the most underestimated yet the most critical phase in the life of a Web3 company. This is where not only the product idea is formed, but also the entire logic of the future business, tokenomics, marketing, and fundraising. Mistakes made at this stage almost always catch up with the project later, when fixing them becomes expensive or even impossible.

At Cware Labs, we refer to this stage as the foundation of investment viability. If the foundation is weak, no amount of marketing, community building, or hype will be able to sustain the project in the long term.

1. Defining the Idea and Concept of a Web3 Product

Most Web3 projects start with a technology or a trend. Some want to “build AI + blockchain,” others aim for “DeFi 2.0,” or “a new L2.” The problem is that the market does not pay for trends. The market pays for solutions to real problems. At this stage, the key task is not to invent a product, but to understand why it is needed.

In our practice, we always begin with a deep analysis of:

The current state of the market and its cycles.
Real growth and decline drivers.
The competitive landscape and its level of saturation.
User behavior in adjacent segments.

It is crucial to honestly answer several core questions: what problem are we solving, for whom exactly, why existing solutions fail, and what would happen if our product disappeared.

If there are no clear answers, the project exists only at the hypothesis level, not as a business. We also place special emphasis on early validation of product–market fit. At this stage, large-scale metrics are not required, but there must be demand signals: user interest, market feedback, and a willingness to test the product or participate in early access.

2. Target Audience and User Behavior Analysis

One of the most common mistakes founders make is having an abstract understanding of their audience. Statements like “our product is for everyone” or “for Web3 users” immediately reduce a project’s investment appeal.

At the research and development stage, it is not enough to simply define the target audience. It is critical to understand their motivations, fears, and economic behavior.

At Cware Labs, we always analyze:

Who is the real user of the product, not just the nominal one?
Which actions are users expected to perform on a regular basis?
What incentives will make them return?
What role does the token or economic model play in this behavior?

This analysis directly influences product architecture, token mechanics, the future go-to-market strategy, and the community format. Projects that skip this step almost always face low retention and weak economics after launch.

3. Defining the Technology Stack and Architecture

Technology in Web3 is not just about “choosing a blockchain.” It is a strategic decision that determines scalability, security, transaction costs, and future integrations.

At the R&D stage, it is critical to:

Choose a blockchain or a multi-chain architecture deliberately.
Understand the limitations and advantages of each solution.
Account for future integrations with DeFi, NFT, AI, or RWA infrastructure.

We regularly see projects that select technology “because it’s trendy,” only to later face high fees, weak ecosystems, lack of grant support, or scalability issues. At this stage, technology should support the business model – not dictate it.

4. Building the Team and Organizational Structure

For investors, the team is the key asset of an early-stage project – especially in Web3, where transparency and public presence play a major role.

At the research and development stage, it is important to:

Build a core team with clearly defined roles.
Define who is responsible for the product, technology, and business.
Bring in advisors who strengthen trust in the project.
Establish a proper legal structure.

We often emphasize to founders that the absence of public profiles, weak LinkedIn or Twitter presence, or anonymity without a clear rationale is a red flag for most funds. Even if the team is small, it must appear structured, manageable, and mature for its stage.

5. Designing Tokenomics and the Financial Model

Tokenomics is one of the most complex – and at the same time most misunderstood – elements of Web3 projects. At the R&D stage, it should be viewed not as a fundraising mechanism, but as a long-term economic system. At Cware Labs, we always start with a fundamental question: Does the project actually need a token, and what function does it serve?

At this stage, the following are developed:

The token’s utility role.
User retention mechanisms.
Distribution and vesting models.
Token behavior across different market scenarios.
The relationship between the token, revenue, and product growth.

In parallel, the project’s financial model is built: revenue sources, burn rate, growth projections, and economic sustainability without constant capital injections. This is where the logic is established that will later be tested by the market and investors.

6. Preparing Core Documentation: Whitepaper and Roadmap

At the research and development stage, documentation should not be marketing-driven. Its purpose is to capture the team’s thinking.

The Whitepaper and Roadmap at this phase reflect the team’s understanding of the market, product logic, economic model, and development sequence. For us, these documents are not a formality, but a diagnostic tool. They quickly reveal whether the team truly understands what they are building and why.

R&D Stage Summary

By the end of the first stage, a Web3 project should have:

A clearly defined idea and use case.
A solid understanding of its target audience.
A selected technological architecture.
A core team and legal structure.
Well-thought-out tokenomics and a financial model.
Initial project documentation.

If these elements are missing, the project is not ready to move into incubation – no matter how strong the team’s enthusiasm may be.

Stage 2. Web3 Project Incubation

Incubation is the stage where a Web3 project either turns into a functioning early-stage business or remains an idea with unrealized potential. This is exactly where most startups face their first serious gap between expectations and reality.

At this stage, a well-designed concept, a polished Whitepaper, or promising tokenomics are no longer enough. The market begins to ask a simple and tough question: what actually works? In our practice, incubation is the moment when a project becomes measurable for the first time.

1. Developing an MVP for a Web3 Product

An MVP in Web3 is not a stripped-down version of the final product. It is a tool for validating key hypotheses: user behavior, technical feasibility, and economic logic.

At the incubation stage, we help projects focus on what truly matters:

Defining the minimum functionality that solves the core problem.
Avoid overloading the product with unnecessary features.
Reaching real users as quickly as possible.

A very common mistake is trying to build a perfect product from the start. As a result, teams spend months on development without receiving feedback from the market. A well-designed MVP allows teams to test architecture and smart contracts, identify UX/UI bottlenecks, collect initial usage data, and understand whether users are willing to interact with the product on a regular basis. For investors, the presence of an MVP is a clear signal that the team can not only think strategically, but also execute.

2. Building a Go-to-Market (GTM) Strategy

A GTM strategy is one of the most underestimated elements of the incubation stage. Many projects approach marketing chaotically – posting on Twitter, running Telegram activities, or attempting collaborations. Without a strategy, this almost always leads to disappointment.

At this stage, the GTM strategy answers several critical questions:

Who is our first user?
Through which channels do we acquire them?
Which metrics define success?
What resources and budgets are required?

At Cware Labs, we build GTM as a system, not a collection of disconnected activities. It includes positioning and messaging, audience segmentation, paid and semi-organic marketing channels, and an operational playbook.

It is important to understand that the goal of GTM at the incubation stage is not scale, but repeatability. A project must prove that it understands how to acquire and retain users – even at small volumes.

3. Building a Community and Early Marketing Activities

At the incubation stage, a community is not about Telegram numbers – it is the core of the project’s future ecosystem. At this phase, it is essential to establish a consistent tone of voice, explain the product in simple terms, showcase the development process, and actively involve users in testing and discussions.

We often see projects with thousands of followers and zero engagement. For investors, this is more of a negative signal than a positive one. A small but active community that understands the product, provides feedback, and participates in early activities is far more valuable. At the incubation stage, the community serves as a critical source of data.

4. Early-Stage Fundraising

Fundraising at the incubation stage is fundamentally different from later phases. At this point, investors are not buying scale or revenue – they are buying growth logic and risk manageability. This makes a well-structured pitch deck, a clear investment blurb, a reasonable FDV valuation, and a transparent legal setup especially critical.

At Cware Labs, we often engage with projects precisely at this stage, because mistakes made here can create a toxic cap table for years to come. It is important to understand that early capital is not just money – it sends market signals, shapes the project’s reputation, and unlocks access to future rounds. That is why we always guide founders to focus on the quality of investors, not just the speed of closing the round.

Common Mistakes at the Incubation Stage

Based on our experience, projects most often make several systemic mistakes:

Launching marketing without a GTM strategy.
Attempting to raise capital without a ready MVP.
Losing focus on the core product.
Overestimating FDV without validated demand.
Trying to appear bigger than they actually are too early.

Incubation Stage Summary

By the end of the incubation stage, a Web3 project should have:

A functioning MVP.
Initial usage metrics.
A clear GTM logic.
An active, even if small, community.
Initial funding or clear readiness to raise it.

If these elements are missing, moving into acceleration almost always leads to problems during the Pre-TGE phase or after listing.

Stage 3. Web3 Project Acceleration

Acceleration is the stage where a Web3 project begins to transform into a real market player. This is where the project’s public image, investment profile, and market expectations around the token are shaped.

In our practice at Cware Labs, acceleration is both the most dangerous and the most valuable stage. Mistakes made here almost always result in a failed TGE or a toxic post-TGE period. However, when this stage is executed correctly, the project achieves a significant increase in trust and capitalization.

1. Product Development and Strategic Integrations

At the acceleration stage, the product must move into a scalable and stable mode. Investors and the market are no longer willing to tolerate immaturity or instability. The key focuses of this phase include refining core functionality, eliminating technical issues, optimizing UX/UI, and improving resilience and security.

Integrations begin to play a critical role at this stage. A project that exists in isolation is perceived by the market as weak. In contrast, integrations with infrastructure protocols, DeFi services, wallets, and broader ecosystems demonstrate that the product fits into the wider Web3 landscape.

A mandatory element of the acceleration stage is smart contract auditing. At this point, an audit is not a checkbox – it is a foundation of trust. The absence of an audit before Pre-TGE automatically reduces the project’s perceived quality in the eyes of funds and exchanges.

2. Pre-TGE Marketing as a Controlled Process

Pre-TGE is one of the most distorted stages in founders’ perception. Many see it as just marketing before listing. In reality, Pre-TGE is about shaping market expectations that the project will be required to meet after the token goes live.

At this stage, it is critical to disclose tokenomics in advance and with full transparency, explain the logic of distribution and vesting, and demonstrate the token’s long-term value – not just short-term upside.

At Cware Labs, we always emphasize that Pre-TGE marketing is not about maximizing noise, but about managing trust. Hype without structure almost always leads to sharp dumps and reputational damage.

Examples of Pre-TGE tools include:

Points systems and whitelist campaigns.
Airdrop mechanics with clear and transparent logic.
Participation in major conferences and events.
PR activities and media coverage.
Collaboration with KOLs and the trading segment.

3. Raising Private Capital at the Acceleration Stage

A Private Round represents the transition from early belief to structured institutional interest. At this stage, investors evaluate not only the idea, but also growth dynamics, community quality, TGE readiness, cap table composition, and valuation discipline.

It is important to understand that private investments during the acceleration stage are not just a source of capital. They serve as a market signal and set expectations for future public participants. A well-executed acceleration phase balances growth, valuation, and investor quality.

Common Mistakes at the Acceleration Stage

At this stage, operational maturity becomes critically important. A founder-visionary and a developer are no longer enough.

The project now requires a marketing team, business development, legal, and compliance support, and structured communication with exchanges, funds, and partners. For investors, this is a key signal: the project is capable of managing growth rather than merely reacting to it.

Based on our experience, this is where projects most often make fatal mistakes:

Rushing into TGE without a ready product.
Creating inflated market expectations.
Neglecting audits and security.
Focusing on “noise” metrics instead of sustainability.
Bringing in random investors just to close a round.

Acceleration Stage Summary

By the end of the acceleration stage, a Web3 project should:

Have a stable and scalable product.
Be integrated into the broader ecosystem.
Have transparent and well-defined tokenomics.
Possess a strong community and media presence.
Be ready for the public phase without losing trust.

Stage 4. Token Generation Event (TGE) of a Web3 Project

A Token Generation Event is not just the issuance of a token or a listing date. It is the moment when a Web3 project faces its first public market test. Everything the team has built in the previous stages – product, tokenomics, marketing, community, and investment strategy – either comes together into a coherent system or falls apart at this point.

1. Public Token Sale and Listing

A TGE involves multiple parallel processes, and a failure in any one of them can undermine the entire outcome. This is why this stage should not be treated as a marketing event. It is an operationally complex and high-risk process.

At the TGE stage, a project must properly distribute tokens among investors, the team, and the community, fulfill obligations related to whitelists, airdrops, and points systems, and ensure full transparency of all terms.

Public rounds (IDO and IEO) should be a logical continuation of the previous stages, not an attempt to sell the token to the market at any cost. Platforms, launchpads, and exchanges evaluate projects no longer as startups, but as public assets.

2. Listing: DEX, CEX, and Market Expectations

One of the most common mistakes is focusing solely on listing as the end goal. In practice, listing is only the beginning of a token’s public life.

At the TGE stage, it is critical to:

Properly structure initial liquidity on DEXs.
Ensure stable trading pairs.
Align CEX listings with marketing activities.
Actively manage the information environment.

The market is extremely sensitive to inconsistencies. If a token launches without clear liquidity, without well-explained tokenomics, or without a visible post-launch development plan, trust is lost almost instantly.

3. Market Making and Liquidity Management

Market making is one of the most complex and often misunderstood aspects of TGE. Many teams perceive it as simple price support. In reality, its role is far more profound.

A well-structured market-making strategy reduces volatility, makes the market more predictable, protects the token from sharp manipulations, and builds trust among traders and institutional participants.

The absence of a market-making strategy or working with unsuitable partners often leads to sharp pumps and dumps that undermine the token’s long-term economic sustainability.

Market Psychology and Expectation Management

One of the key success factors of a TGE is expectation management. In Web3, the market often operates on emotions, but it is precisely at the TGE stage that the team must demonstrate maturity and control.

It is important to understand:

Who exactly holds the token during the first weeks?
What are their motivations – speculative or long-term?
What token volumes are unlocking from vesting?
How will this impact the market?

Projects that fail to manage this process often face a situation where the token is formally launched, but the ecosystem is not ready to support it.

Common Mistakes at the TGE Stage

Based on our experience, projects most often make the following mistakes:

Entering TGE without a sustainable product.
Promising more to the market than they can deliver.
Underestimating the role of liquidity and market making.
Focusing on token price instead of token utility.
Stopping active communication immediately after listing.

Token Generation Event Summary

A successful TGE is not about day-one multiples, but about:

A stable market entry for the token.
Preserved community trust.
Predictable price behavior.
The project’s readiness for long-term development.

Stage 5. Post-TGE Development of a Web3 Project

Post-TGE is the stage where a Web3 project either proves its long-term viability or permanently loses market trust. This is where it becomes clear whether the Token Generation Event was part of a sustainable long-term strategy or just a one-off event.

In Cware Labs’ practice, we see that most Web3 project problems arise not before TGE, but after it. The reason is simple: many teams underestimate the complexity of managing a public token and an ecosystem. If before TGE a project operates like a startup, after TGE it begins functioning as a public economic system.

1. Product Scaling and Ecosystem Development

After the token launch, the team’s focus must shift from attention generation to building sustainable value. The market quickly loses interest in projects that fail to demonstrate progress after listing. At this stage, regular product releases, feature expansion, UX improvements, and user retention become critical priorities.

Ecosystem thinking takes on special importance. The project stops being a single product and begins to evolve as a platform: third-party developers emerge, partnership integrations are formed, grant programs are launched, and DAO governance is strengthened. For investors, the Post-TGE stage is a test of the team’s ability to manage growth – not just execute a launch.

2. The Role of the Community After TGE

After TGE, the nature of the community changes. If earlier it was primarily a source of support and hype, it has now become a token holder, a governance participant, and a critic of the team’s decisions. One of the most common mistakes is a sharp decline in communication after listing. Projects that disappear after TGE quickly lose loyalty and trust.

At this stage, it is essential to regularly explain the team’s decisions, involve the community in governance and voting, demonstrate transparency in finances and the roadmap, and actively address negative feedback rather than ignoring it.

3. Tokenomics Optimization and Institutional Development

Tokenomics after TGE is a living system, not a fixed document. The market evolves, user behavior changes, and the project must adapt accordingly. During the Post-TGE stage, the team works on managing emissions and unlocks, balancing liquidity, designing long-term incentives, and implementing loyalty and retention programs.

At the same time, the project enters a phase of institutional development: negotiations with funds and strategic investors, OTC deals, preparation for Series A or strategic rounds, and adaptation to regulatory requirements. Projects that reach this stage in a mature state begin to be perceived by the market not as crypto startups, but as fully-fledged Web3 companies.

Common Post-TGE Mistakes

Based on our experience, projects most often make the following mistakes:

Treating TGE as the final destination.
Stopping active product development.
Failing to manage token holder expectations.
Ignoring institutional investors.
Failing to adapt to changing market conditions.

How All Stages Align with the Cware Labs Scoring System

All stages of Web3 company growth are directly reflected in the Cware Labs Scoring System – an analytical framework designed to objectively assess a project’s maturity and its readiness to move to the next stage.

The scoring system covers 7 core development blocks, ranging from research and team composition to TGE preparation and Post-TGE growth. Together, they form a holistic view of the project, highlighting not only its current state but also the gap between where the project is today and what investors expect at the next stage.

We use this model for due diligence, startup acceleration, fundraising preparation, and collaboration with venture funds. For founders, it is a tool for honest self-assessment and prioritization. For investors, it is a fast way to understand the real quality of a project without diving deep into operational details.

The scoring system does more than assign numbers. It provides a clear action plan and shows which changes are required to move to the next growth level and increase investment attractiveness.

We offer a free express scoring of your Web3 project. Within 72 hours, you will receive:

A project assessment across 55 parameters
A PDF report with key growth insights
Practical recommendations for the next development steps

Fill out a short form to see your project through the eyes of venture investors: https://cwarelabs.com/form.

Conclusion

Web3 often creates the illusion of fast wins, but in reality, sustainable success is built on the same principles as any other business: strategy, discipline, and a clear understanding of growth stages.

Each stage serves a distinct purpose:

Early stages establish logic and foundations.
Incubation and acceleration prepare the project for public exposure.
TGE opens access to the market.
Post-TGE transforms a token into an ecosystem.

At Cware Labs, we do not sell illusions or promise guaranteed multiples. We help Web3 projects navigate this path consciously – mitigating risks at every stage and building long-term value.

If you are building a Web3 company and want to understand where you stand today and what is preventing you from reaching the next level, this is exactly why a systematic approach, a clear methodology, and an objective external perspective matter.

Follow Cware Articles for more in-depth analyses, case studies, and practical tools for founders, investors, and teams building in Web3: https://cwarelabs.com.