Startups of any kind generally need money. Occasionally, founders are able to fund themselves or garner enough through friends and relatives. Most often, though, they must look for outside funding. And to get that funding, they must develop some type of business plan to “prove” to investors that they are offering a valuable product or service.
In the world of crypto, this business plan is called an Initial Coin Offering (ICO) Whitepaper. It is a bit different from traditional funding requests because it offers a cryptocurrency to its investors, rather than a percentage of profits or a promise of repayment of a loan. Cryptos become a sort of like shares of stock in the company, and, as the company flourishes and grows, the value of those cryptos increases, just as the stock would.
How an ICO Whitepaper is Developed
While the final format and structure may vary somewhat, all ICO whitepapers will provide the same information to potential investors. And there is a process that experience shows is the best.
- Long Before the Whitepaper is Actually Written
An ICO begins with a great idea for a product or service, just like any business begins. The first step in the process of founding that company, and ultimately financing it through an ICO is to create what is often called a “light paper.” This will be used to obtain advisors who will help with all of the details that go into the whitepaper. There are a few steps involved, and they should not be taken lightly.
- The product or service idea must be refined and reduced to writing. Unless you have a very clear understanding of what you intend to produce and offer to the public, you will not attract any investor.
- Think about the value that your product or service will bring to potential customers/clients. It must fill a gap in the niche/industry, and meet a need that is either not being met or is under-met. You need to identify those needs and explain how your product or service will fill them.
- Read other examples of successful whitepapers. How are those products or services presented? How do those founders make a compelling case for their products or services?
Reduce all of this to a light paper that can be used to attract advisors, not necessarily team members or investors at this early stage.
- Finding the Right Advisors
Once that light paper is polished and ready to go, it is time to find advisors. There are lots of them floating around, marketing themselves on crypto sites, on social media, etc. The key will be to find those that are truly professional and have a recent history of successful advising others. As you conduct your research and “interview” potential advisors, look out for the “red flags:”
- Advisors who want payment in advance should be avoided. Advisors who really believe in you will forego payment until a later time.
- Successes should be very recent, given the rapidly changing crypto environment.
- Some advisors will request a large percentage of your token economy. Again, do the research and find out what other founders promise to their advisors.
- If advisors insist that they get payment as soon as the launch occurs, walk away. They are not in it for the long haul.
You will now need to look for advisors who can offer the following. If they have multiple skills that you need, so much the better.
- You need a diversity of skills among your advisors. Of course, you want blockchain experts, but you also need marketers, legal advice, PR, and connections with influencers who value their recommendations
- You want at least one advisor who has recently written successful ICO whitepaper
- At least one advisor must have access and full knowledge of exchanges, KYC, wallets, etc. They can help you make decisions on which ICO platforms and wallets are the best for you.
- A blockchain specialist. You need an expert to design your blockchain so that investors have confidence. Blockchain techies are a growing breed, especially since the “big boys” like Amazon have entered this “world.”
- A Tokenomics expert. You need someone with a solid history in token metrics, to help you decide how many tokens to offer and the value of a token at launch.
Once you have the right advisors, you are ready to move on the whitepaper creation.
Writing the ICO Whitepaper
While they may vary somewhat in sequence, all ICO whitepapers should include some standard sections that all investors will want to see. If you do not fully develop each section, your launch will fail. Your advisors are invaluable as this is crafted, and you may even want to find pro writers with experience from multiple writing services like GrabMyEssay or SupremeDissertations. They can review your sections and make suggestions. Some of then can also conduct some of the research you need for specific sections, especially related to the marketability of your product or service.
The following outline the sections you need to include, along with a brief description of what should be included:
Section 1: Your Mission Statement
This is the beginning, and it must be engaging and compelling. You are passionate and enthusiastic about your idea. Project that passion in your mission statement. What is the value? What are you contributing to your niche/industry?
Section 2: Present Your Team
This will include your reputable advisors, along with any team members you have brought on board as you have worked to bring your project to fruition. The goal here is to convince potential investors that you have a team with all of the expertise you need to bring your project to a successful launch and beyond.
You need to craft exceptional bios that provide amazing backgrounds, achievements. Link to their LinkedIn profiles, personal websites, or any writings they have prepared. Review their other social media accounts and be certain that they highlight their expertise. Definitely, include headshots, and make them as similar as possible.
While advisors may have developed their own brands and bios, it is still best to review them for consistency of presentation and for specific relevance to your concept. This may mean that you pass all of this information onto a professional writing team that can craft those presentations
Section 3: All About Your Product or Service
Most of your potential investors will not know a lot about your product or service. And so, you must provide a detailed explanation. Not only that, however, you must explain the niche/industry into which your product/service fits. How strong is it? What are the growth factors? And how does what you offer differ from what’s on the market right now. You have to prove value and/or uniqueness and show that there is a demand.
Section 4: More Detail About Your Product
This is often combined with Section 3, but it addresses more than the current market demand for what you offer. You have to show that it will solve a customer/client problem or pain point. A simple example is as follows: Busy working millennial couples have issues with meals. They don’t like fast food, and they don’t want to go out for dinner every night. And so, there are now services that deliver fresh food on a weekly basis, so that couples can cook quickly and enjoy healthy choices. It’s become a big industry.
Section 5: The Technology
Your potential investors are those who have an interest in ICO’s. They generally understand, at least generally, how blockchain works. While you don’t want to bore readers with the deep details of the technology, you do need to have your tech advisor prepare this section, so that investors understand that it has been well-designed.
Section 6: Your Token Metrics
This section will be prepared by your token economy expert, with your review and approval of course. How many tokens will you offer for purchase by investors? What will be the launch value of your tokens? There is a lot of research and analysis involved in this step. If you have a solid token economist, this step will be handled well.
You have to understand that some of your potential investors are not cryptocurrencies experts, and your whitepaper should address why your crypto can be a good investment venue.
Section 7: Strategy for Marketing and Growth
Investors want to see a solid plan for marketing, or they will not “bite.” You need to show that you have a detailed plan, that it is backed by target audience research, and maps out a sequential process for bringing the product/service to market, getting the PR necessary, and spreading the word all over the web. What are the marketing plans? They must be detailed and demonstrate expertise.
- Don’t overwhelm your audience. It’s easy to do, but restrain yourself. Be clear and concise, and simplicity is really preferred. Avoid industry jargon. Remain on point with a proving need for your product/service and the value it will provide in filling a gap within the industry.
- Even if you have to find graphic artists, the use of visuals is critical. Your presentation must be visually appealing, of course, and it must also include graphs, charts, infographics, etc. that will reinforce your textual content. Visuals are far easier for readers to digest, so use them whenever possible.
- Ask objective outsiders to review your whitepaper and give you feedback on their ability to absorb what you have stated. Many of your investors will be like your colleagues who do not have deep knowledge of your product or service, even if they do grasp the technology of an ICO.
As to Examples of ICO Whitepapers
There are a large number of successful whitepapers out there for you to review. You need to read a number of them because there are some differences in format and structure. They can provide you with several options as you craft and format your own.
The bottom line is this: Your ICO Whitepaper is what will attract investors. But it is more than that. It is a map for your project, going forward. If it is crafted well, it will serve you well.
About the Author: Nicole D.Garrison is a content strategist, writer, and contributor at PickTheWriter and a number of platforms for marketing specialists. She is a dedicated and experienced author who pays particular attention to quality research. At her free time, Nicole is a passionate runner and a curious beekeeper. Moreover, she runs her own blog LiveInspiredMagazine.