Read Me If You Can! An Analysis of ICO White Papers

Initial Coin Offerings (ICOs) are a new form of venture capital financing that raised more than 30 billion US dollars between 2016 and 2019. ICOs opened up the venture capital market to a more diverse investor base previously limited to “sophisticated” investors. This study analyses 1,258 white papers and finds that the length is positively correlated with the amount raised during the ICO and the likelihood of successfully completing the ICO. In contrast, the readability grade of the white paper is only positively correlated with the amount raised. The study highlights the role of voluntary disclosure in the ICO market.