If your startup deals with blockchains, cryptocurrencies, or tokens and you need funding, the white paper is the fundamental document that you will need to produce and subject to a thorough examination by its adopters and potential investors; below you will find out what it is, how to draw it up and above all who to contact for the best white paper for your startup.
What white paper means
The white paper, according to Investopedia, is “an informational document, usually issued by a company or a non-profit organization, to promote or highlight the characteristics of a solution, product or service”.
According to Wikipedia its purpose is “to promote a product or technology by showing its key characteristics, possible uses, and strengths”.
What is the white paper?
The white paper in the world of startups is nothing more than a detailed description of your blockchain project aimed at the community and investors to allow them to evaluate its prospects and benefits and to decide on possible financing.
The good quality of a white paper greatly increases the chances of a project being successful; in fact, it is the tool for attracting the attention of potential investors and therefore for attracting the capital necessary to carry out the project.
A typical problem with these documents in the world of cryptocurrencies is that they can be difficult to understand and can often hide inconsistencies in or the lack of feasibility of a project. The public, despite the rise of cryptocurrencies, is not very well informed on the subject and therefore is unable to understand its contents in detail.
For this reason, investors run the risk of being scammed with projects that have nothing innovative or no chance of effective implementation.
On the other hand, the people who draw up these documents are generally computer engineers. As much as they simplify terms and concepts, their white paper may not be easy for everyone to understand. This is why both parties have to make an effort. The author must try to make the content easily understandable; the reader must have some level of training regarding the topics.
Why is it essential?
Several surveys that have been conducted (Savvy B2B Marketing) have established that business white papers together with demo software are the most widely-used forms of content for researching IT problems and solutions and above all the most effective. A total of 77% of potential investors read the white papers and 84% say they are the key elements that help shape their purchasing decision.
The white paper is also a sophisticated form of content marketing before case studies, success stories, product brochures, datasheets, detailed technical guides, and video or multimedia files.
During the pre-sale of an initial coin offering, the white paper is considered the best form of content when investors aren’t even aware of the problem being solved.
Post-sale sentiment shows that the white paper is the preferred content as 7 out of 10 respondents look forward to continuing to receive content from vendors after the sale.
Objectives of the white paper
A corporate white paper is a key element for increasing the interest of users, and above all, investors for blockchain and token projects; in fact, after browsing the white paper, the reader can determine how high the quality of the proposed development is and how promising it is. A successful project has a detailed and easy-to-understand description.
In order to make the document understandable to the wider public, it is necessary to find a suitable language; it must be simple but without losing the technical value of the content. And if the proposed system is professional and solves important global problems, it has a good chance of being successful in its field.
Corporate white paper: how to draw it up
In general, a blockchain white paper, for its complexity best defined as a business intelligence white paper, should be simple but contain all the important technical, financial, and business details. To convey the information correctly, the text should be divided into the appropriate sections. Numeric data should be graphed and then summarized in one or more tables.
The reader of a white paper always expects to find answers to the following questions:
- What problem are you trying to solve with your project?
- By using what technology do you plan to solve it?
- How long will it take for the project to be finished?
- What team is working on the project?
- What track records does the team have?
- How are tokens used and how does the investor benefit from them?
- How is the project financed?
- What will the project managers spend the funds on?
- What promising developments await us?
The problem you want to solve
Each new project tries to solve a problem that exists or will arise in the near future. This is the key element that every business white paper should highlight, so that interested parties can know that the purpose is concrete and useful.
This section presents the project, including the problem to be solved and how to solve it. The solution provides the details of the full product description as well as a market analysis to show the exact need for the product and how it fits into the existing market.
How you plan to solve the problem: technology
This point is the most important for an investor in cryptocurrency. After reviewing it, the reader should be able to figure out which idea to invest in. The team should clearly explain its intentions and define the central goal, allowing the reader to find a great innovation in the white paper, an innovation that will ideally change the way of doing business. In particular, investors will appreciate useful innovations that can directly affect network users.
This section explains the technical aspects and the technology behind the project
Team and consultants
As in any startup, information on founders, employees and consultants is fundamental for the development of the project as it provides essential and important information on the skills and experience of the team and its relevance to the project.
This section introduces the founders, employees and consultants behind the project, as well as their track records
As cryptocurrencies or tokens become a means of investment, a potential investor should understand the project’s financial system in detail. Tokens can play the role of stocks, but tokens often become a single means of payment within the digital system for using the technology.
This section analyzes the details of the issuance of new cryptographic tokens, their value, how many will be in circulation, and on which platform they will operate. The white paper should also include how investors can redeem their tokens, as well as details on what will happen if the fundraiser fails to meet the goals of the funding.
Example of a white paper
Did you know that the Bitcoin white paper will turn 14 in 2022? First published on October 31st, 2008 by the anonymous Satoshi Nakamoto, Bitcoin was the first decentralized cryptocurrency to offer a peer-to-peer online payment system without the need for a bank or financial intermediary. It also proposed a solution to prevent double-spending of transactions in a continuous hash-based proof-of-work chain, forming a record that cannot be changed. In other words, transactions that are registered on the Bitcoin network cannot be changed once they have been validated.
Despite initial skepticism, fourteen years of support from the community have made it one of the most profitable investments of the digital age. So much so that by many it is even considered “digital gold and, despite its volatility, it remains the leading cryptocurrency with a market capitalization to date of over $700 billion.
The Bitcoin white paper is a simple nine-page document that lays the foundation for the cryptocurrency itself. The document, although short, is not easy to understand for those who do not have advanced knowledge of programming and mathematics, therefore, it is clearly intended for an eminently technical audience.
Creating a white paper with B-PLANNOW®
If your startup deals with blockchain, certainly what you need is a white paper
It constitutes the deepest image of a project based on blockchain technology, indicating the willingness of a team to give a detailed explanation of its objectives, techniques, processes, and resources necessary to execute it successfully; a good document will reveal, therefore, how well prepared a team is and how serious and professional the members are about their project. A white paper is, therefore, the key document because it will be subjected to scrutiny by its adopters and by its potential investors.
Fortunately, the blockchain world has evolved today and misleading information does not stand up to scrutiny by the DLT community. Several projects have already robbed naive investors and there has been growing discontent both inside and outside the community … white papers today serve as a bulwark against this unethical behavior.
Even the eye of the experienced investor has changed; in fact, he examines the white papers with a magnifying glass, making a detailed analysis of the problem presented, its solution, the proposed technology, the platform and processes that execute the solution, the applications (cases of use) of the solution, the team and the necessary resources.
Therefore, business white papers need to be convincingly designed so as to highlight the logical criteria, commercial profitability, and technical robustness. These criteria must be met in full in order to gain the trust of the investors and especially of the community that will be adopting it.
Of course, this is far from simple, because a corporate white paper must be full of encyclopedic information on the project while remaining accessible to the general, less professional audience.
B-PLANNOW®, thanks to its experience and professionalism, provides you with a specialized service that can help you in this necessary and mandatory challenge in today’s crowded world of blockchain.
Download an example of white paper made by B-PLANNOW® here!
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Now that you know everything about what it is, what it is for and how important it is to have a white paper for your startup, all you have to do is contact us, talk to us about your idea and shape it together with us!