How to write a financial plan for a blockchain start-up?

Jessica Fender

Author

 

Start your blockchain start-up’s development on the right note with practical advice on how to write its financial plan properly


Launching a new blockchain-centric start-up in 2021 can be lucrative for several reasons. According to data, 74% of executives believe in the business potential of blockchain, with 24% of businesses investing $5-10 million into blockchain technology in 2021.

With a good idea, you can capitalize on the popularity of blockchain and successfully bring your ideas to fruition. Additional statistics indicate that 71% of business leaders who use blockchain in their companies actively contribute to advancing technology on the global level. Whether you plan to launch a cryptocurrency or a disruptive piece of technology based on blockchain, here’s how you can write your financial plan.

blockchain start-up

How to write a financial plan for a blockchain start-up?. Source: unsplash.com

Start with your executive summary

The executive summary section of your financial plan will be used as a quick reference tool for anyone interested in the start-up’s development. Think of it as a summary that needs to contain short information from all the subsequent sections of the financial plan.

In practice, this section should be written last but placed before any other section to hook the reader from page one. It can contain information like your blockchain start-up’s name, the purpose for existing, development plans, financial backing goals, and development outcomes in few short sentences.

Describe your blockchain business

What exactly is your blockchain start-up about? Your business’ description will be the first proper introduction to your business plans for many backers and investors. As such, you should describe what it is you will do, how you will do it and why you are doing it in detail.

You can look at Incent, a blockchain cryptocurrency start-up from Australia to get a good sense of how to describe your own business. As you can see, your pitch should contain information on the benefits of your blockchain business existing on the market and several long-term development milestones.

Outline the market you will penetrate

You need to instill confidence in your investors that you know what you are doing as a start-up CEO. This can be done by doing proper market research and explaining how your business will stack up against other companies in the same industry.

You can check out the latest news in the blockchain and cryptocurrency industries to get a good understanding of what to expect going forward. Analyze the market as best as you can and try to gauge where your start-up would fit in terms of scale and ambition. This will give you an indication of what financial resources you will need to develop and how to carve out your place on the market.

What makes your blockchain start-up different from competitors?

No matter where you look for financial backing before launch, investors will want to know what makes your blockchain start-up unique. For example, Nuspay is a US-based blockchain start-up to facilitate ICO projects and cryptocurrency exchange to accelerate FinTech market growth. How would your start-up be different, and what would you do better than entrepreneurs who came before you?

This is where you will have to flex your sales muscles, as public backers and investors like to see ambition and long-term planning from CEOs. You can order news article writing to get some writing assistance in case you don’t know how to formulate your sales pitch effectively. Think about all the things which make your blockchain start-up unique and use that to your advantage.

Describe your development team in detail

Working with experienced blockchain and cryptocurrency experts will always inspire confidence in your ideas. Look for people who would be willing to cooperate with you on developing the blockchain start-up and present them in your financial plan.

Any backer familiar with the industry will appreciate seeing familiar references and faces in this section of the document. Similarly, your start-up will benefit greatly from having experienced people on board ready to help develop your ideas. Your team can act either as active developers or as supervisors and mentors assisting you with coaching and financial advice.

Draft your initial token mechanism

How exactly will your tokens function once the business goes public? Financial backers will want as much information as possible on the subject to gauge their financial returns before backing you. Your token mechanism will determine how tokens will be distributed, what value they will hold, and how people can exchange them.

As an example, GeoPay is a cryptocurrency blockchain start-up with the mission to make international payments as easy as possible. They are partnered with Binance and OCCE Exchange among others, which boosts confidence in the security and professional nature of their start-up. You can use this section of the financial plan to also give unique advantages to early adopters and people who back your start-up before launch. Initial tokens can also have added value which is very tempting for investors, so consult a financial expert and draft your token mechanism in detail.

Describe your financial and timeline requirements

Once you’ve outlined what your start-up is all about and who will work with you, you should go into detail on your financial requirements. What kind of monetary resources do you need to make your ideas a reality? Giving your financial backers a solid estimate of your financial goals will ensure that you are seen as a professional with concrete plans in hand.

Will you rely solely on venture capitalists, token sales, or your personal funding and forgo any upfront financial backing? Failing to give a clear financial projection can seem suspicious, especially if this is your first time launching a blockchain start-up. Following that, you should also outline your development timeline and estimates on when initial tokens will become available. Investors only invest in start-ups from which they can profit, so this section of your financial plan needs to be as detailed as possible.

Putting your financial plan into practical use (Conclusion)

Whether you need public funding and financial investors or not, writing a financial plan for your blockchain start-up is a very helpful business development step. Even if you are experienced in the cryptocurrency and blockchain market, writing such a plan will help you put your ideas and goals into perspective.

Take the time to draft your financial plan before you take any concrete steps to develop your start-up, and you will have an easier time. Managing its development will be more straightforward, and you will attract better interest in it thanks to your foresight.


Jessica Fender is a copywriter and blogger with a background in marketing and sales. She enjoys sharing her experience with like-minded professionals who aim to provide customers with high-quality services.


SEE ALSO: