In the world of the Initial Coin Offering, the primary document is called the Whitepaper which covers the key elements of a blockchain-based, tokenized system and associated token sale. Since most projects are in the early phase – conceptual/prototyping, the whitepaper contains not only the business fundamentals, but also the technical underpinnings to the project. Here’s a list of topics to include your whitepaper.
- Introduction with problem description–set the context for the ICO with the problem you are solving. It helps your case to use numbers to make the problem more specific.
- Solution—describe your solution and how a tokenized, decentralized blockchain system solves the problem.
- Technology background—show the technology plan behind the solution. At a high level show how you plan to attack the problem.
- Team—show the team especially the technical members who will build the system.
- Token Description— show how the token works with the proposed system. Those who contribute receive tokens while those who draw value from the system are contributing tokens.
- Sale methodology & Redemption process—Show what the tokens cost and how one signs up to buy those tokens. This also includes maximum number of tokens as well as discounts for pre-sales and bounty programs. In addition describe future redemption plans based on lockup periods.
- Market size and competitive analysis—show the size of the market you are pursuing and what portion of the market your solution addresses.
- Security Considerations – show how your token relates to securities laws and if your backers must be accredited investors?
- Potential Risks – outline the risks in the project including technical, marketing, and otherwise.
- Disclaimer—list the caveats for the token backer including securities issues.
Since the ICO focuses on blockchain technology and the industry is in its early stage, the two key elements backers look for are a strong technical team, and a compelling use case that doesn’t require a tremendous amount of infrastructure to be in place.
Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more. Connect with him about fundraising, business growth, and emerging technologies.
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