A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?

Security token offerings (STOs), based on blockchain technology, are attracting increasing attention as an innovative alternative means of venture financing. Information about specific STOs is generally provided in white papers. This study analyses the content of white papers using a unique sample of 188 STOs from 2017 to 2021 to identify which topic is related to campaign success. We leverage latent Dirichlet allocation (LDA) topic modelling to identify the topics and themes in white papers. Nine topics are identified through LDA: company description, distributed ledger technology components, energy and green issues, financial and legal issues, artificial intelligence, and tech applications in different industries—specifically, healthcare, manufacturing and construction, education, and financial services. We find that energy and green issues represent one of the most prominent topics among all types of projects and that their disclosure is positively related to the probability of campaign success and the amount of funding raised. Another prominent topic that affects campaign outcomes is technology in the healthcare industry, reflecting wider investment trends in this sector. Our results may help entrepreneurs to improve their campaign disclosures and present new issues for policymakers regarding investments in digital tokens.