New companies are entering esports on a near-constant basis. Especially with the recent mainstream coverage and explosive growth into betting and fantasy, esports seems a prime target for ambitious investors and entrepreneurs. Indeed, we’ve seen many notable organizations join just this month alone, from ESPN to WeSC.

How should we evaluate these companies? Here are a few considerations.

Prior Reputation

If a company already exists, and is now entering esports, definitely consider that company’s reputation in pre-existent circles. A good reputation is unlikely to change, and a bad reputation is likely to continue. Take a look at headlines involving both the company, and judge whether any bad activity is likely to continue.

This also includes people within the company. Martin Shkreli, for example, has been investigated by the SEC and was sued by Lehman Brothers, and to nobody’s surprise, was a corrupt CEO. His esports team, coincidentally, went nowhere, and broke significant promises to at least one professional.

Promises

Another thing to consider is any promises made when entering the scene. This is especially true for brand-new companies with no history behind them. Initial problems can be incredibly telling both about a company’s intentions, but also about its perception of the industry and its capabilities.

Take, for example, trig. Back in 2014, the company entered the scene with some big-name player signings, but no real substance. Without any clear direction, Trig Esports promised a streaming platform, original video content, and even a reality TV show about esports. Many remained skeptical, and it was no surprise when the company was raided a year later by Swedish police—it was all a scam.

Having realistic expectations and presenting them to the public when entering esports is critical. My advice to a company taking the plunge? Remain conservative. Make some promises, then complete them and do a good job. That’s the best way to build a good reputation and be accepted.

Business Model

Another element is how a company’s business model is supposed to work. Is an incoming company’s business model realistic? If not, people running it probably don’t have a good idea of how esports works.

This can be hard to evaluate, at least at first, especially since some companies are funded off venture-capital, and likely don’t have profitability as a primary concern. However, it’s still realistic that the company present a plan of sustainability. ESGN was a prime example of this. When the company started, it spent massive amounts on a studio, on big-name personalities, and threw lavish parties. But it has no appearance of sustainability, and fell just a suddenly, leaving many without jobs.

In the end, any company seeking to enter esports should be looked at with a critical eye. Giving these companies the benefit of the doubt is fine, but becoming reliant on them is a huge mistake, especially if done before they prove themselves. The only sure way of finding success is putting up consistent results and finding stability.