Web2 to Web3: The Due Diligence Guide to Spotting Corporate Rug Pulls

In this episode, we explore the "Due Diligence Trap"—the dangerous assumption that established Web2 companies are inherently safer than anonymous DeFi projects. While these companies often come wrapped in a veneer of legitimacy with "glass offices" and "real reputations," their transition into crypto can often be a "desperation play" or a sophisticated way to offload risk onto retail investors. We break down the three main pivot patterns—the full pivot, the subsidiary spin-off, and the "token enhancement"—and explain why the traditional framework for vetting projects often fails when these hybrid models are involved.Key Topics Covered:The "Real" Motivations Behind the Pivot: We look past the marketing narratives of "decentralization" to identify four common (and often hidden) incentives: parent company financial distress, regulatory arbitrage, executive cashouts, and financial engineering for survival.The 5-Part Due Diligence Framework: A practical guide to vetting these projects, including:Real-World Case Studies: Lessons learned from distressed gaming companies, "subsidiary shields" in fintech, and brand license extractions.The Investor’s Checklist: Eight critical questions every investor must answer before putting money into a Web2-to-Web3 transition.