Last year was a big year for ICOs. The total amount of money generated from ICOs exceeded $2 billion in 2017, proving that ICOs are an effective way for companies to access capital. The reason for this spike in the number of ICOs is clear. Traditional forms of access to capital such as loans or share sales simply are not as practical to companies as ICOs are.
The downside to the surging popularity of ICOs is the dramatic increase in competition. While this increase does mean a growing pool of investors looking to ICOs as a good investment, the days of companies hastily throwing together an ICO in order to raise money for their next project are over.
ICO investors have grown increasingly sophisticated in a very short space of time. With far more examples of what makes a good ICO, including the business models behind them, investors are now much more educated in how to sift out a good ICO from a bad one.
One of the key components that allows investors to really determine whether or not to part with their money is the ICO white paper. Though it is not always the case that the most successful campaigns have the best ICO whitepaper, without a really great whitepaper investors are much less likely to invest your ICO.
In this article, I aim to show how your company can create its own white paper for an ICO. I will include some examples and links to sources where you can find past examples of what makes a really great ICO white paper.
All of these examples come from successful ICO campaigns that have been launched in the last few years. Keep in mind when doing your research that the marketplace is evolving fast, meaning that ICO white papers from more than 4 or 5 years ago simply aren‘t up to the standard that today‘s investors demand. So if you were planning to just download the 2009 Bitcoin white paper and use that as a template for your own, forget it.
What is a white paper?
A white paper is a document that outlines a problem along with the solution (your project) you have found to fix it. It details exactly how your technology works, including a detailed explanation of your technology‘s architecture to explain how it works to solve the problem. A good white paper should read more like a science paper than a piece of marketing literature in the sense that it should be clear, concise, and extremely detailed.
That said, however, the real reason companies issue a white paper is to sell their product. So in this sense, a white paper really is fundamentally a marketing document at heart. Any author of a white paper for an ICO needs to keep this in mind as all great whitepapers really do sell the product despite not appearing like they do. You will see a few great examples of this later on.
Another important part of a white paper is that it includes up to date data on the current market situation and clearly shows where you see your products growth potential as coming from. This data is important as not only does it show your growth targets but also allows investors to understand your calculus behind the value and number of crypto tokens that you have decided to issue.
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A good ICO whitepaper really has only one aim. To persuade investors to buy the tokens you issue as part of your ICO. But in order to achieve this, your whitepaper needs to inform, persuade, satisfy and reassure every single one of them. This is why creating only the most outstanding ICO whitepaper for your company will do.
How to create your own white paper for ICO
A good white paper should comprise of the following parts:
Nailing your project outline is vitally important. It should clearly define exactly problem you intend to solve. Key to the project outline is to make it unique and catchy. It absolutely needs to stand out from the crowd and make investors want to read on. Given that the average investor will read hundreds if not thousands of whitepaper outlines every year, it is not difficult to see why most only get as far as the project outline.
This is the section where you need to make your project shine. The solution should include a thorough breakdown of your project, including a full project description, to show exactly how it solves the problem you just outlined. It needs to include detailed market analysis data to show exactly what the need for this solution is and how it fits into the preexisting marketplace.
Obviously, most companies will only have an outline or prototype of the project that they wish to undertake. In this case, you should include as many of the visual data or mockups that you have to help investors visualize your project.
A budget breakdown is a good way to reassure investors about how you intend to spend the money. This will help them evaluate your project plan as a whole and also convince them that your ICO is not a scam.
Another thing that is good to include in this section is some form of development roadmap. This will help give investors an idea of where you see the project heading and reinforce their confidence that you understand the marketplace that you are about to enter.
Again, making this section stand out is a must. Key to this is emphasizing the unique selling points of your project.
A detailed explanation regarding token release and marketplace considerations
In this section, you need to give a breakdown of your ICO token issue. This should include details regarding your crypto tokens, including their value, how many you intend to use, and which crypto token platform you intend to issue them. Another important point to include is how you intend to allow investors to redeem their tokens and details on what happens if your ICO doesn‘t reach the funding targets it outlines (investor refund process).
This section should also include your terms and conditions or a link to your website where they can find them.
Finally, this section should also detail all the relevant security details that will help investors determine if your ICO is safe. Should you have chosen to employ a specialist security firm to launch your ICO, then you can also include information on their company.
Remember, no matter how attractive your ICO might seem to investors, no person on this planet is going to pay for digital tokens if they believe there is a good chance that the transaction is not secure.
Overview of entire team
Including the profiles of all the different team members really helps to increase both investor confidence and interest. Such is the market these days that the support of certain individuals from within the blockchain community can guarantee an ICO success.Â Though most ICOs don‘t have the luxury of having the support of such individuals, investors now desire to see who is involved in the project and what their backgrounds are.
If any of your team has a background that includes a successful ICO launch then you should certainly include this information in this section. Remember, the key point here is to convince investors that your project has the passion and technical knowledge to succeed. If they believe it has then they will be happy to hand over their cash.
ICO white paper examples
There is no better basis for an ICO white paper template than those that have been used in successful ICOs in the past. Of the 10 most successful ICOs ever, Ethereum has been the biggest. As one might expect, its ICO white paper is outstanding and so should be the first example you consider. However, remember that you these examples are just a template. You definitely want to make your white paper unique so it stands out.
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While this paper remains an example of the very best white paper to date, remember that it has now become a much-copied format and so won‘t grab investors in quite the same way as it originally did.
When reading this white paper note how well presented it is. It has a clear table of contents that includes fast-track links to each of the appropriate sections. The whitepaper includes all of the information I have detailed above which is presented in dedicated sections.
The introduction is really captivating and includes dramatic use of language as a cunning marketing ploy. It clearly defines what the project is about and includes potential user markets. Cunningly, while listing possible uses, it adds “as well as many others that we have not yet imagined”. Rather than creating the impression that the project managers don‘t understand their market, it, in fact, whets investors‘ appetites as to the enormous unforeseen potential of the platform.
Despite the sheer amount of information contained in this white paper, it reads very well. This fact is helped by the inclusion of diagrams, lists, and code to help illustrate exactly how Ethereum works and why it is such a good solution.
The paper concludes with links to additional information that helps to plug any gaps that it did not have time to cover.
While the Ethereum whitepaper contains all the elements than any investor needs to determine their interest in an ICO project, the sheer volume of information might be too much for some companies to put together without any assurance of the IPO‘s success.
ICONOMI proved that it is possible to produce a white paper for an ICO with much less technical information included. Their 2016 ICO managed to raise over $10.5 Million, becoming the 11th most successful ICO ever.
Once again it covers all the points listed in this article and used dramatic terms and examples to lure investors in. Removing much of the technical detail (due to it being a different type of project), this paper instead shoots straight for the mark by focusing on listing goals and targets that the project expects to meet.
The white paper introduction establishes a market need for the project before going on to show exactly how it will meet these needs. All the way through the paper reinforces the unique selling points of the project so that by the end investors are left in no doubt that this is one that will succeed.
For other great examples of great ICO white papers try these links:
My Final Thought
While it is certainly true that competition is fierce in the ICO marketplace right now, a good white paper can help make all the difference between success and failure. Having a great project doesn‘t necessarily ensure investors will flock to fund your project. Presentation is a vital part of any successful ICO just as it is in any other business plan.
By doing your research and following the key points I have outlined in this article you will be able to put together a really good white paper. Remember that part of your research involves identifying and understanding your target investors. Consequently, your language, as well as your content, should be shaped by what will be of interest and appeal to them.
By examining the two examples I have given, you should see just what I mean. Investors who lack a strong understanding of blockchain technology and programming are less likely to read Ethereum‘s white paper than that of ICONOMI. Both papers are specifically targeted to read well to the type of investors they want.
Finally, while it might be hard to hear, investors are not likely to want to fund a bad idea regardless of how good your whitepaper might be. So make sure you nail a good project idea that really makes it a great investment.