It depends on two things: Information barriers and how they quote.

First, ensure there is a robust Chinese wall between the firm's investment team and its trading desk. Being an investor must not give the trading side access to material non-public information that could alter their market-making behavior. The risks are concrete: Pulling bid-side liquidity ahead of a negative announcement they know is coming, or lifting ask-side liquidity (i.e., buying) in advance of a positive announcement. Without a verified information barrier, the engagement creates an inherent conflict that no amount of contractual language can fully mitigate.

Second, evaluate how they quote. Many market-making desks operate alongside an investment arm that functions as a loss leader — the firm accepts below-market returns on the investment side to secure the market-making engagement. This is a common practice, and it is not inherently problematic, but it means the investment relationship may be subsidizing the commercial terms you are being offered. Projects should be aware of this dynamic and avoid defaulting to a cap table market maker simply because the relationship already exists. Instead, run their proposal through a competitive process: Compare their quote against independent market makers, and evaluate their historical trade activity using Forgd's Market Maker Leaderboard to ensure you are selecting based on execution quality, not relationship convenience.

If you do engage a cap table market maker, pair them with at least one independent market maker to establish a competitive performance baseline and ensure ongoing accountability.