Whitepaper Quality and ICO Success: The Role of Textual and Visual Characteristics

In recent years, Initial Coin Offering (ICO), a novel fundraising method, has gained popularity for financing innovative entrepreneurial projects. This alternative approach has piqued the interest of both practitioners and academics alike. However, studies conducted in this research area are limited. In particular, the role of disclosure quality and the characteristics of the whitepaper in ICO success is still little explored. This study aims to fill this gap by examining the effect of two components of the whitepaper: textual disclosure and visual disclosure. To this end, a logistic regression model was performed on a sample of 320 ICO projects. Empirical results demonstrate that the readability, positive sentiment, and number of pictures in the whitepaper have a positive influence on ICO success. Furthermore, they demonstrate that the length of the whitepaper and the presence of charts within this document have a negative effect. This study significantly enriches the literature on ICO success and offers important practical implications for ventures, individuals, and regulators aiming to launch or oversee ICO projects.