The role of advisors’ centrality in the success of Initial Coin Offerings

Initial Coin Offerings (ICOs) are unregulated offerings of digital tokens on the Internet, built on the blockchain technology, as to provide a means to collect finance for a project, disintermediating any external platform, payment agent or professional investor. ICO proponents are usually teams made up by entrepreneurs, professionals, technicians and managers, eventually assisted by an advisory committee. In this work, we analyse the determinants of the characteristics of the advisory board and using different centrality and connectedness measures from social network analysis we analyse the relationship with the ICO fundraising success. We find that larger and more experienced teams are more likely to appoint a committee of advisors and its presence is significantly correlated with the ICO success. Different facets of the ICO centrality in the advisors’ network are associated to different effects. We find a U-shaped relationship between the number of advisors’ connections, their capability to act as ‘bridges’ in the network and the ICO success; we also find that, in order to raise larger amount of money, it is important to hire advisors which are linked to ‘well-connected’ advisors in other ICOs and are more closely linked to all other nodes in the network.