ICO whitepapers: how to write an effective ICO whitepaper

The popularity of ICOs as a means of startup fundraising is ever growing despite the fact that the vast majority of ICOs never reach their fundraising targets. Yet, ICOs have already surpassed traditional VC rounds in terms of funds raised. As per TechCrunch, ICOs have generated at least 3.5 times more capital to startups than VCs since 2017.

While there can be many reasons for an ICO to be successful or unsuccessful in fundraising, the ICO whitepaper can also play a major role in the success or failure of an ICO. Here we are going to discuss some of the tips and best practices for creating an impactful ICO whitepaper.

Whitepapers and ICO whitepapers; are they the same?

As per Wikipedia, the definition of a whitepaper reads as “…an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing body’s philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.” A classic example of a whitepaper within this definition would be the Bitcoin whitepaper released by so-called Satoshi Nakamoto back in 2008. However, an ICO whitepaper has an additional purpose compared to a generic whitepaper; that is fundraising. Therefore, the ICO whitepapers are essentially fundraising documents as well apart from the purpose of a generic whitepaper.

ICO whitepapers and business plans

Being a fundraising document, an ICO whitepaper may have some components as same as a business plan, which is a more common fundraising document often with a larger scope. However, ICO whitepapers generally include theoretical and technical aspects of the solution in greater detail than it is required in a typical business plan in addition to unique sections such as token economics. Given below are some of typical business plan components/chapters and their potential applicability in an ICO whitepaper.

Technical whitepaper and ICO whitepaper

Having a single document, which serves both generic whitepaper purpose and fundraising purpose can sometimes be tricky. This is especially the case where the whitepaper is highly technical and needs extensive explanations of concepts. On the other hand, one cannot expect all ICO investors to be tech-savvy. One way to overcome this situation is to have two whitepapers; a technical whitepaper and an ICO whitepaper. The technical whitepaper will have all the technical details while ICO whitepaper will have all general content including token economics, market analysis, etc. If one selects a single document as majority ICOs does, it is a good idea to discuss technical matters under separate components/chapters so that non-tech-savvy readers who do not want spend time in reading and understanding complex technical details can skip such parts.

Structure of an ICO whitepaper

While there is no and need not be a standard way to structure an ICO whitepaper that would fit every project, following structure could be something that anyone could start with:

1. Table of contents/outline
2. Executive summary/overview
3. Team
4. Problem
5. Solution
6. Market traction (If MVP available)
7. Use cases
8. Roadmap
9. Market analysis
10. Fund requirement/use of funds
11. Token economics/ICO structure
12. Legal terms/conditions

Executive summary/overview

Executive summary or the overview is probably the most important component of an ICO whitepaper as it is the chapter that most ICO investors would read in full. Therefore, it needs to provide a hawk’s eye view of the project that can be read and understood ideally in less than 15 minutes.

Team

The strength of the team is crucial for the success of any venture. It is important to elaborate on the skills, qualifications, and experience of the team members, which are relevant to the project scope. If the project has a strong team with high-profile members, then it is a good idea to get the team section right after the executive summary/overview. If not, it may be given later in the structure.

Market traction

If the project already has an MVP/prototype with or without market traction, that can be a huge plus point for an ICO whitepaper as many ICO projects are simply at the idea stage. And sometimes they are notoriously little more than dreams of the founders in written form with no real action taken. It is always advantageous to show that the project has moved forward from the idea stage. Therefore, if the project has an MVP/prototype or any market traction, those facts should be presented as early as possible within the structure with due prominence to get the attention of the reader.

Roadmap

It is necessary to have a clearly identified roadmap/development plan until the intended commercial product or service is released to the market. Each milestone of the roadmap needs to be clearly defined so that the reader is made clear what is to come out and when. Where some of the milestones are already achieved, that fact should be mentioned with due prominence as it adds to the credibility of the project.

Writing style and language tone

Generic whitepapers generally follow a formal writing style commonly used in research papers. And most of the early ICO whitepapers followed the same style, which largely appealed to the technical community. But today, ICOs have also become popular among non-technical general investors and this has resulted in a larger scope of the target audience for an ICO whitepaper.

Although an ICO whitepapers may still follow the same writing style as in a research paper (in fact there were many such ICO whitepapers whose ICOs became highly successful in fundraising), it is important to keep in mind that an ICO whitepaper needs to be persuasive as well as promotional to some extent in order to attract potential investors, which may sometimes be difficult if the style sticks to a generic research-paper type writing style.

The content can be written from either first person perspective or third person perspective. The former style writes the content as if someone from the team writes (usually use words, “we” and our” to refer to the project) while the latter style writes content as if someone from outside writes (the project is often identified by the brand name or company name in such case). While the first person perspective can appear less formal, it is perfectly alright for any ICO whitepaper. What is important here is the consistency; whatever the style is selected, it has to be used consistently throughout the document.

Factual accuracy and referencing

Unlike business plans, ICO whitepapers are meant to be public documents. It is very likely that the experts in the crypto space such as reviewers, analysts would deep dive into the specifics of the document. Therefore, it needs to be factually correct in every respect. No content should be plagiarized or copy- paste from other ICO whitepapers/documents. Extracts from other documents may be used but they need to be given proper reference. If one really needs to use some part of the content from another document, one option would be paraphrasing. The risk here is that if someone finds and publishes an issue with regard to factual accuracy or plagiarism of the ICO whitepaper, it can negatively affect the ICO marketing campaign. This can be quite detrimental to the campaign if such claim, be it a single Facebook/forum comment, Tweet or other mention online comes from an influential figure in the crypto space.

Review and proofreading

Like in the case of any other publication, a proper review process is necessary for an ICO whitepaper before it is released to the public. This is especially important where the document is written by an external expert outside the team. The team needs to be involved in the process and take the ownership of the document ensuring their ideas and plans, not the writer’s, are laid down in the document.

Proofreading is necessary to make sure the document is free of grammatical errors, spelling mistakes and typos. As an ICO whitepaper is likely to include technical staff and jargons, proofreaders would ideally need to have a technical background.

Length/size of the document

Again, there is no and need not be a standard size; but one would find hardly any investor who would be willing to read a 100-page document. The rule of thumb would be shorter, the better. However, detailed explanations of the problem or solution are quite necessary, although it can lead to a lengthy document, one option would be to have two documents as technical whitepaper and ICO whitepaper as discussed before.

Graphical elements

Generic, research-paper style whitepapers normally use plain text without any colorful graphics. However, an ICO whitepaper needs to create the highest possible positive impact with the least possible time in the minds of the reader in order to increase the chances of converting a reader into a token purchaser. Colorful and relevant designs, infographics, charts, diagrams, etc. generally help convey a message more clearly and faster. Graphics can also help keep readers interest to read on without being bored. Therefore, graphic design is always recommended for an ICO whitepaper. However, care must be taken to ensure that the document does not appear too promotional to a reader after graphic design as it can affect the seriousness and the weight that it is supposed to create in the minds of the reader.

Final thoughts

While a good ICO whitepaper can be a great tool that can help build credibility in investors’ minds to invest in a token, it is by no means a replacement for a weak idea, solution or team. (On the other hand, a poorly written whitepaper can harm a project even if it has a great idea, solution, and team). Therefore, the priority should be given to identifying the right problem and solution that would have a sufficiently large commercial market for the ultimate product or service that the project is to offer.