You’ve got an amazing blockchain business idea and now you’re looking for investors and seed funding, but ideas alone will not lure investors to throw money at the best idea unless there’s some kind of history and business plan in place. That’s where an awesome whitepaper comes in. With emerging blockchain technology, Initial Coin Offerings (ICO) were all the rage in 2017. Many of the projects allowed legitimate developers, and some shady characters, to raise millions of dollars. The successful fundraisers had their whitepaper penned with a made-for-success business plan. Our goal is to give you a quick guide in penning an awesome whitepaper for the success of your business and crowdfunding initiatives.
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What is a Whitepaper?
A white paper is an authoritative report or guide that gives its readers a clear understanding of your project, business or initiative; presents the issuing body’s philosophy on the matter, and helps its readers understand what the issues are, how they can solve it, and what the future holds with your project in it. Indeed, a Whitepaper answers several questions for investors.
What’s the problem?
What’s our solution?
Who’s leading the team?
What are the financial goals?
How will the business evolve in the future?
The whitepaper is not a “fluff” piece that can be thrown together in a day. Here’s what is required to pen an effective whitepaper.
Every single area that your whitepaper needs to cover should be thoroughly researched. Pull as much information as you can about the problems that you want to solve; what worked in previous attempts, and what failed. This information can be in the form of articles, reports, or testimonials and interviews that can be used as citations in your whitepaper. The more you know the higher your credibility score ranks. Whitepapers are all extremely data-focused. So, fill the pages with facts and data. A good whitepaper is one that has been supported by significant research. In cryptocurrency or blockchain-based projects, people want assurances and transparency. Give it to them.
Survey the competition
Check other whitepapers for similar projects. How are they approaching their target market and investors? What makes your project the better choice? Be as objective as you can and improve your pitch. We’d recommend revisiting the classics such as the Bitcoin and Ethereum whitepaper.
Structure your whitepaper
After distilling all the research and creating diagrams and graphs, your whitepaper needs structure. Outline your whitepaper in a way that makes sense; take your potential investors on a journey through your vision. If it’s a jumbled mess, no one will give it a second glance. It’s time to get organized.
Find a competitive writer who picks up on all the details of your project. Remember, a great whitepaper answers all these questions:
What is the main aim of this project?
Does it have a viable business model?
What are the main problems that this business is going to solve?
How is it different from its competitors? What is its USP?
How will it handle or distribute funds?
Does the project’s token have any real utility?
Does this project require a blockchain?
Who are the team members and what makes them credible?
Is there a working prototype of this project out there or is it just all theoretical right now?
Important sections to include In Your Whitepaper
Headline and Abstract
The headline is an important section as that instantly grab your attention and make you feel intrigued enough to know more. An abstract is basically a summarized version of your project, essentially the TL;DR of the entire whitepaper. More often than not, people will read your abstract to know what you have to offer. That is the piece that will either tempt them to keep reading or move on to the next project.
After the abstract, is the introduction. The introduction justifies the purpose of your project and then briefly goes over the current economic and/or political abstract, management overview, and the needs of your project.
Why is your project important?
What problems are you solving through your project?
Why do you need to raise funds?
Your introduction only gave the reader a taste of what’s to come. The problem statement then dives deeper into detail and broadens the scope of your project. Remember all the research you did in prepping for your whitepaper? Your outline should include in-depth analysis of the problems, the overview of what is or is not available to fix the problems, and how your project and team will save the day. Several projects simply showcase over-designed PDFs throwing around a bunch of problems and solutions without actually getting in-depth, solutions-based information. Your whitepaper is not a place for irrelevant filler. State the problem. Explain your fix. Be informative.
The token role should be as clearly defined as possible. The more utility your token has, the more valuable it will be. Your token should not be a placeholder that anyone will swap for BTC or Fiat. It should be a proven commodity that people will want to hold on to in their portfolio.
The concept of token velocity is intertwined with why you would want people to hold on to your tokens. Token velocity is one of the key aspects that affect the future speculative value of the tokens, however not a lot of people truly understand it.
If you were to look at Token Velocity as a mathematical formula, it is as follows:
Velocity = Total Transaction Volume / Average Network Value
So, Velocity is directly proportional to the total transaction volume of a coin and is inversely proportional to the average network volume.
If you flip this formula around, then you get the following:
Average Network Value = Total Transactional Volume / Velocity
Meaning, more the token velocity, less the average network volume of the ecosystem. Velocity is an indicator of the popularity of your idea.
Every whitepaper should have a road map which records the history of key events for the business and proposed future deadlines. The section can be stylized as a chronological diagram that is more visual than text-based.
- It gives investors a visual of where the project’s been and where it’s going
- It enables a sense of accountability and trust that deadlines are set – even if they are not set in stone
- Provides a detailed working plan for the next 12–18 months, which should include a beta-launch
Team and Advisors
Easily one of the most important parts of your whitepaper is the section where you introduce your readers to your team. This is the part that goes a long way in helping your team secure an investment.
Putting together a whitepaper is one of the most challenging parts of the business journey but once the whitepaper is ready, presentations get easier, people will onboard faster and your crypto community will grow because they are putting faith and trust into your due diligence and your dream.
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