Top 16 ICO Whitepaper Mistakes

Dmitry Mishunin
Oct 9, 2017 · 5 min read

Русская версия:

In past month alone I’ve received a dozen of requests from projects running for ICO, asking for my auditing services. I’m glad to see the direction changing from ‘let’s launch an ICO with whatever we have’ to a thoughtful preparation of data and content to support the project. This approach benefits not only potential investors but the project team as well, providing the cheapest solution to discover the hidden pitfalls.

The first thing I review during my audit is ICO Whitepaper. In this post I will cover the most popular whitepaper mistakes which could scare away not only a qualified investor, but a twice shy newbie.

1. Whitepaper Structure

With ICO, fundraising became too easy. If you come to a venture fund or business angel asking for money without a business plan, you will be kicked out. However, when running for ICO, teams relax and get too creative, forgetting about the standard documentation requirements.

Whitepaper structure must be built from ‘general’ to ‘specific’, in that particular order:

  1. Abstract
  2. Introduction
  3. Market
  4. Analysis methods & tools
  5. Analysis
  6. Conclusions
  7. Business Model Methodology
  8. Business Model
  9. Economic Model behind the Token (if any)
  10. Token sales
  11. Investor Interest
  12. Legal Framework and Investor Rights Protection
  13. Risks
  14. Roadmap
  15. Team
  16. Advisors

2. Introduction that does not “introduce”

Introduction is the most important section in whitepaper. 90% of potential investors will stop reading if introduction doesn’t resonate with them.

What should be included in introduction?

  1. Rationale. In introduction, you need to justify your choice of idea for the project, and briefly describe today’s aspects of economics, management, laws, or other current social processes, which support your choice. In other words, introduction should explain why this project is important, and why it is important in this particular moment.
  2. The object and subject of research. Object is the area of research, while subject is the process being researched in that area.
  3. Research goal (the desired outcome of your research).
  4. Research objectives and methods.
  5. Practical relevance of your project.
  6. Summary of whitepaper sections.

What shouldn’t be included in introduction?

Everything besides what is described above. Introduction should be only 1–1.5 page long. It should take one minute for an investor to read it.

3. Formatting Mistakes

  1. Incosistent layout and styles
  2. Screenshots of various resolutions used as visualizations
  3. Pictures spilling over the document borders

You are not another Facebook yet! You cannot show up sloppy in front of your potential investors.

4. Subjectivity instead of Objectivity

Quite often I see authors making conclusions which are based not on the impartial statistical evaluations (derived from large-scale researches, expert interviews, focus groups, etc), but rather on their own assumptions. This looks grossly unprofessional.

5. Competitive Advantages

Here are our competitive advantages:

1. Monetization

2. …

3. …

Strong product will always have a strong demand and great ROI, even without a straightforward monetization scenario.

Competitive advantages is the second most important section for the potential investor. They are the reasons people decide to put their money into your project.

6. Competitor Analysis

This section is often deemed unnecessary, and therefore, either omitted or presented with subjective comparison criteria, for the ICO product to win by a long shot. Legitimate competitor analysis must always start with a user survey to define feature set for competitive comparison.

7. Economic Model

Economic model is often outlined without specific numbers or calculations. It is impossible to model the project performance without numbers.

8. Ambitious Goals not backed up by Architecture

We will build a blockchain bridge to the moon, with hoverboard and vape!

How we gonna do that? What should we base it on?

We should launch our own CPA-CPC-CPM Google-killer!

9. No Profit-Loss Model

Whitepapers often lack transparent profit and loss calculations with all the formulas, conversion multipliers, user volume estimates, etc. Authors don’t even provide the estimates of potential client database growth.

10. Distribution of Tokens and Funds

10% bounty, 0% marketing, 20% team, 20% R&D, 50% investors.

The team must have a clear understanding of the following:

Difference between tokens and funds. They also must know how to calculate the efficient cost of token after token sale.

Expenses structure. Including the office rental, coffee machine and internet costs.

10. Token

Token purpose is not clear, its price and caps are not defined.

11. Team

The team must include only those who are capable to deliver the project. This means that each team member must bring enough expertise in his professional area. Investors don’t want to sponsor your training or your useless best friend’ salary.

12. Advisors

Why would a decentralized exchange need a motivational speaker? How would a logistics expert benefit an online casino?

13. Investor Interest

This section must be clearly written out, with numbers and calculations, similar to sections about economic model and profit & loss. So that any investor could easily estimate their potential profit and risks.

14. No Legal Section

No one wants to donate money to you. The more information you provide on legal questions and investor rights and funds protection, the more investors will trust you.

Legal section can be organized into three parts:

  1. Token legal types. Incorporation decision.
  2. Investor agreement which includes the clear legal mechanism of token purchase: terms and conditions, rights and responsibilitities, conflict resolution.
  3. Licensed escrow agents involved to protect investor funds. Large investors will unlikely invest in projects which deliberately choose not to hire an escrow. There could be no reason why the team wouldn’t want to bring in an escrow, rather than malicious intents. When you agree to receive funding in stages, you confirm that ICO is just a part of product and company development roadmap, not a one-time hit and run case.

To my mind, Legal section is the most important one for the project team. Nobody wants to end up in jail.

This section is better to delegate not to a just savvy lawyer, but to a man having practical experience, applicable specifically to ICO. There are many international teams working on these issues, I personally can recommend Arbi.

15. Unmeasurable roadmap

Roadmap must include not only timed deadlines, but also comprehensive and measurable milestones.

16. Abstract

Congratulations to those who have read that far! Spare those who don’t have half an hour to read your whitepaper. Write a one-pager with project summary. Abstract is the best way to target the widest top of your sales funnel.


Following the rules and avoiding most common mistakes described above will not guarantee the success of your ICO project. However, I can guarantee that it will reward you with more respect from your potential investor.

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