The Three-Pillar Evaluation Framework
How AltStreet evaluates alternative investment platforms across integrity, market structure, and governance — with an emphasis on claims defensibility, disclosure quality, and real investor risk.
This framework is applied across all AltStreet platform reviews — from carbon credits to tokenized treasuries, from fractional farmland to litigation finance. It is designed to explain why two platforms offering similar-sounding products can represent radically different risk profiles — even when prices, credentials, or marketing claims appear comparable.
Why a Platform-Specific Framework Is Necessary
Alternative investment platforms span fundamentally different business models and risk structures. A carbon credit marketplace operates differently from a litigation finance fund, which operates differently from a tokenized treasury platform. Yet many platforms use similar marketing language: "diversification," "uncorrelated returns," "institutional-grade access."
Treating these platforms as interchangeable based on surface-level similarities obscures material differences in asset quality, economic incentives, legal protections, and who ultimately bears risk when something goes wrong.
Core Principle: Platforms should not be evaluated as universally "good" or "bad." They should be evaluated based on what role they play in the value chain, who carries risk, and how defensible their claims are under regulatory, legal, or reputational scrutiny.
Scope of Application
This framework is applied across all alternative investment categories covered by AltStreet, with sector-specific adaptations as needed. The three pillars remain constant; the evidence, metrics, and tradeoffs shift based on asset class.
Asset-Based Platforms
- Carbon & Climate Finance
- Tokenized Real-World Assets
- Fractional Real Assets & Farmland
- Digital IP & Royalties
- Classic Cars & Watches
- Mineral Rights & Energy Royalties
Market Infrastructure
- AI Infrastructure & Compute
- Private Credit & Lending
- Structured Credit & Securitization
- Secondary Startup & Pre-IPO Markets
- Litigation Finance
Specialized Markets
- Art & Collectibles Fractionalization
- Emerging & Frontier Markets Debt
- Sports Betting & DFS Arbitrage
- Insurance-Linked Securities
- Water Rights & Environmental Credits
- Luxury Asset Funds & Indexes
- Peer-to-Peer Lending & Notes
The Three Pillars
Pillar I — Asset Quality, Integrity & Verification
This pillar evaluates whether the underlying asset, claim, or investment thesis is credible, verifiable, and defensible. It focuses on the integrity of what is being sold — not the platform selling it.
Core Questions:
- Is the underlying asset real, legally sound, and properly documented?
- What verification mechanisms confirm asset existence, ownership, and performance?
- How are valuations determined and by whom? Are they third-party, mark-to-model, or mark-to-market?
- What durability, permanence, or longevity assumptions underpin the investment thesis?
- Are there independent audits, registries, certifications, or chain-of-custody records?
Category-Specific Applications:
Carbon Credits: Additionality, permanence, MRV methodology, registry verification
Fractional Real Estate: Appraisal quality, property inspection, title insurance, rent roll accuracy
Tokenized Treasuries: Custody arrangements, NAV calculation, underlying asset verification
Litigation Finance: Case assessment quality, legal opinion credibility, claim valuation methodology
Music Royalties: Catalog audit, streaming data verification, copyright chain-of-title
Critical Insight: A platform can score exceptionally well on asset integrity while still being a poor fit economically, contractually, or structurally for a given investor. This pillar answers "Is the underlying investment real and credible?" — not "Is this a good deal for me?"
Pillar II — Market Structure, Economics & Business Model
This pillar evaluates how the platform is positioned within its asset class value chain and how economic incentives are structured. It clarifies who bears risk, who controls pricing, what the investor is actually purchasing, and how liquidity assumptions are set.
Core Questions:
- What is the platform's business model? (Marketplace, principal, fund manager, registry layer, reseller)
- How are fees structured and disclosed? (Management fees, performance fees, transaction costs, markups)
- Does the platform take proprietary risk or act as an intermediary?
- What liquidity assumptions underpin the offering? (Immediate settlement, lock-up periods, secondary market access)
- How is pricing determined? (Fixed, negotiated, auction-based, opaque)
- Are there minimum investment requirements, accreditation requirements, or investor suitability standards?
Category-Specific Applications:
Private Credit Platforms: Origination vs aggregation model, credit underwriting standards, loss allocation waterfall
Fractional Collectibles: Valuation methodology, exit strategy, storage/insurance cost allocation
Tokenized RWAs: On-chain vs off-chain settlement, smart contract economics, redemption mechanics
Secondary Pre-IPO Shares: Bid-ask spreads, matching mechanisms, tender offer participation rights
AI Compute Tokens: Yield generation mechanism, token utility vs speculative value, validator economics
Critical Insight: Many investor risks originate in market structure, not asset quality. Platforms that abstract pricing, portfolio composition, or delivery timelines often reduce friction for investors — but they also increase opacity and shift risk onto the investor without explicit acknowledgment.
Pillar III — Governance, Legal Protections & Disclosure
This pillar evaluates what happens when something goes wrong. It focuses on contractual clarity, investor remedies, data access rights, regulatory compliance, and the platform's disclosure posture — areas often omitted from marketing materials but critical to long-term investor protection.
Core Questions:
- What legal structure governs the investment? (Fund, SPV, direct ownership, tokenized wrapper)
- What contractual protections exist for investors? (Recourse provisions, indemnification, replacement policies)
- How are investor rights defined? (Voting, information, exit, transfer)
- What disclosures are provided? (Conflicts of interest, related-party transactions, fee breakdowns, risk factors)
- What regulatory framework applies? (SEC registration, state-level exemptions, offshore structuring)
- How is data access, exportability, and auditability handled?
- What remediation or replacement policies exist for underperforming or fraudulent assets?
Category-Specific Applications:
Fractional Farmland: Land title structure, operating agreement terms, manager removal rights, exit liquidity mechanisms
Insurance-Linked Securities: Cat bond trigger definitions, parametric vs indemnity structures, reinsurance counterparty risk
Structured Credit Funds: Credit agreement covenants, servicer replacement provisions, waterfall priority, disclosure of underlying collateral
Digital IP Royalties: Platform bankruptcy protections, data portability, revenue reporting frequency, streaming service contract terms
Litigation Finance Funds: Case selection criteria disclosure, settlement approval rights, manager co-investment requirements
Critical Insight: Strong governance and disclosure do not eliminate investment risk — but they determine whether investors are left holding reputational, legal, or financial exposure alone when adverse events occur. Platforms with weak governance often appear attractive during good times and only reveal structural flaws during stress.
How to Use This Framework
Individual platform reviews apply this framework with category-specific evidence, tradeoffs, and fit classifications. No composite scores or star ratings are generated. Each pillar is assessed independently to preserve decision-relevant detail and avoid false precision.
What This Framework Enables
- Clear differentiation between platforms within the same asset class
- Identification of hidden structural and contractual risks
- Claims defensibility analysis for regulatory or reputational exposure
- Fit-based platform selection aligned with investor risk tolerance
- Comparison across business models (fund vs marketplace vs tokenized wrapper)
What It Does Not Do
- No composite scores, rankings, or star ratings
- No direct investment recommendations or "buy/sell/hold" guidance
- No independent verification of underlying assets or third-party claims
- No "best platform" or "winner" declarations
- No guarantee that high scores in all three pillars ensure positive returns
Important Disclaimer
AltStreet platform reviews are educational and analytical in nature. They do not constitute investment advice, endorsements, or recommendations. Investors should conduct their own due diligence, consult with qualified advisors, and carefully review all platform documentation, offering materials, and contractual terms before making any investment decisions.
Methodology & Research Standards
AltStreet platform reviews are based on publicly available information, platform documentation, offering materials, user agreements, and where appropriate, direct engagement with platform representatives. Reviews are updated periodically to reflect material changes in platform structure, regulatory status, or business model.
Evidence used in evaluations includes: SEC filings and Form ADV disclosures, platform terms of service and subscription agreements, third-party audits and verification reports, registry records and transaction data, industry benchmarking and peer comparisons, and regulatory guidance applicable to the asset class.
AltStreet does not accept compensation from platforms for reviews, does not guarantee favorable coverage in exchange for access or information, and maintains editorial independence. When affiliate relationships exist with reviewed platforms, they are explicitly disclosed within the review.
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