Investable Solutions launches a unique ICO service for startups

Everybody is talking about ICOs, but almost no one really knows what it means to ICO. Investable Solutions, Isreal’s leading startup consultants is now launching a unique service that allows startups to navigate the murky waters of raising money through Initial Coin Offering (ICO), helping startups understand the how and what of ICOs and assisting them launching successful campaigns.

Some background first

ICOs are a way for a company to offer crypto-assets, such as a digital coin (think: bitcoin) to the public in order to raise funding, and many startups have been doing just that to raise initial capital, often instead of raising angel or VC rounds.

2017 was definitely the year of the ICO. According to reports from financial analysis firm Autonomous NEXT, the amount raised by companies in ICOs during 2017 surpassed $4 billion as opposed to only $225 million in 2016 and a mere $8 million in 2015.

As professional business consultants we have been helped hundreds of companies form their strategy and package it as a business plan, and in the past six months we have been involved in the creation of several white papers in preparation of ICOs.

We have discovered that there are many things that startups do not know or do not understand about the process of ICO. To help these startups out, Investable Solutions is offering pre-ICOconsultantation as well as specialized serviced for the ICO process itself.

For example, one of the major elements in a succesulICO is its white paper.

What is an ICO white paper?

A white paper is a document that details all the relevant information for anyone who is interested in purchasing a crypto-asset. White papers have existed for ages, but until recently were used mainly to detail technical data and use case investigation for technological products.

Offering a crypto-asset white paper is a tradition that started with Satoshi Nakamoto’s nine-page white paper, which was a detailed support manifesto for the original bitcoin currency.Since then, any company that issues a new crypto-asset have pitched their new offering using a white paper.

White papers have been evolving since the Satoshi Nakamoto’s original paper, and their final format and contents have yet to be agreed upon by the community at large. Therefore, there can be a lot of variance between one white paper and the next.

Like any document, white papers can be professionally written, or can be a haberdashery of crypto-slang that was purchased on Fiverr.com and is not worth the virtual paper it was published on. In this article I will only comment on the former version.

So, it’s a business plan?

Yes and no. There are many similarities between a white paper and a business plan. Mainly, they both need to convey the essence, plan, and uniqueness of the company to the reader. However, there are also many differences.

Ok, so how are white papers and business plans different?

Let’s start with the similarities. Both a business plan and a white paper must address five major aspects of the underlying business:

·         The need / problem – why does anyone need another crypto-asset. How will it solve an existing problem, or make our lives better?

·         The Solution – how are we solving this problem and why are we doing it with crypto-assets (or blockchain in general).

·         The Team – who are we, why are we uniquely qualified to do this?

·         The Market – who will be using our solution, how big is the market? How many users are there? How are they segmented?

·         The Competition – what other solutions may be solving the same problem? How are we doing it better?

However, even when the two are similar, the business plan and white paper actually address different aspects of the same coin (pun semi-intended). A business plan will focus on the company and how it creates value by addressing the need in a specific market. The white paper, on the other hand, must focus on the crypto-asset, and how it will create value which may not be directly linked to the issuing company. For example, in a white paper about a coin used for car sharing, the business plan will focus on the company providing the software to enable car sharing while the white paper will need to focus on the drivers and riders and their interaction using the crypto-asset.

This is also where the similarities end.In order to convince (e.g., put their mind at ease) investors and coin purchasers that the new crypto-asset offers an amazing investment opportunity, the white paper must address several other issues, including (and this is in no way a comprehensive list):

Technical

·         What is the platform the crypto-asset is using, and how is it using it? In the case of blockchain infrastructure this segment must be extremely detailed to convince readers why a new infrastructure is actually needed and how it will work better than existing infrastructure.

·         How are new crypto-assets issued (mined? minted? Pre-offering)?

·         How are the crypto-assets protected? What’s to prevent people from stealing/copying/duplicating crypto-assets?

·         How do the asset-holders hold, sell, buy, and transfer the crypto-asset?

Business

·         What are the different use cases for the crypto-asset? How will they change and grow over time?

·         How does the crypto-asset interact with other existing businesses and crypto-assets?

·         Has the underlying product or service launched? If not, why not and when?

·         Who are the existing miners, node-operators, or stake-holders in the underlying blockchain? What is their incentive structure?

Economical

·         How many coins are there? How many are planned? What is the issuance model?

·         What are the blockchain economies here – what will create new value for the crypto-asset and how?

·         What is the ecosystem for users, merchants, and traders? How will it grow and expand? What is the company’s stake in making this happen?

Financial

·         What are the terms of the ICO? How much is pre-allocated to the team and what for?

·         What size of fund raise is needed to make this vision into a reality?

·         Who are the early investors and how much was pre-sold at what terms?

·         Are there any guarantee structures?

Wow, that’s a lot

Yes. And that is just the proverbial tip of the ice berg. Writing a good white paper is about providing information. The more information you have, the more the educated investor feels comfortable purchasing your crypto-asset.

However, just like a good business plan, a white paper should be readable, tell a store (albeit a more technical story), and highlight the company’s strengths and vision.

https://investable.solutions/
Aaron Rothenberg
aaron@investable.solutions
Israel

 

 
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