Startups of any kind generally need money. Occasionally, founders are able to fund themselves or garner enough through friends and relatives. Most often, though, they must look for outside funding. And to get that funding, they must develop some type of business plan to “prove” to investors that they are offering a valuable product or service.
In the world of crypto, this business plan is called an Initial Coin Offering (ICO) Whitepaper. It is a bit different from traditional funding requests because it offers a cryptocurrency to its investors, rather than a percentage of profits or a promise of repayment of a loan. Cryptos become a sort of like shares of stock in the company, and, as the company flourishes and grows, the value of those cryptos increases, just as the stock would.
How an ICO Whitepaper is Developed
While the final format and structure may vary somewhat, all ICO whitepapers will provide the same information to potential investors. And there is a process that experience shows is the best.
- Long Before the Whitepaper is Actually Written
An ICO begins with a great idea for a product or service, just like any business begins. The first step in the process of founding that company, and ultimately financing it through an ICO is to create what is often called a “light paper.” This will be used to obtain advisors who will help with all of the details that go into the whitepaper. There are a few steps involved, and they should not be taken lightly.
- The product or service idea must be refined and reduced to writing. Unless you have a very clear understanding of what you intend to produce and offer to the public, you will not attract any investor.