Science Inc. is launching an initial coin offering (ICO) to finance a new incubator. The incubator is based out of Silicon Beach and is known for investing in companies like DogVacay, Dollar Shave Club, and FameBit. It has formed Science Blockchain, which is an incubator that is focused on companies that are deploying and developing blockchain technology, preferably those that support ICOs.
Blockchains are shared, public ledgers that record transactions between individuals and companies. They have been used for bitcoin transfers but can be used for all kinds of transactions.
“There’s no question blockchain is a transformational technology that can disrupt the way nearly every business or financial transaction takes place,” said Science founder and CEO Mike Jones in a statement. “Yet it’s still at an early stage of its development and so represents a major growth opportunity for both entrepreneurs and investors.”
The new ICO funding the initiative will allow investors two ways to participate. The first is through direct distribution of the tokens issued by portfolio companies to incubator token holders. The other is by using a fixed percentage of returns from the sale of portfolio companies to buy back those incubator tokens on the open market.
Science Blockchain hopes to raise from $50 to $100 million through its ICO. There will also be a presale for certain investors starting on September 18th. The public sale will begin on October 2nd.
First in Class
While Science Blockchain is hardly the first investment vehicle to offer participation for investors via an ICO, it is the first incubator that is doing so. The incubator believes they have their bases covered as far as legality with ICOs go, especially considering the recent ruling from the Securities and Exchange Commission.
“We wanted to put our money where our mouths were out of the gate,” Science founder and Chief Executive Officer Mike Jones said in a statement, “and we also see a major opportunity to help set a new bar for ICOs themselves, so from the outset, we’ve intentionally looked to issue security tokens under the Regulation D exemption from registration set forth by the U.S. Securities and Exchange Commission.”
Many companies offering ICOs are new and offer little more than blueprints and plans for future business ideas. Science, on the other hand, enters with plenty of experience as they have co-founded or invested in over 70 companies. There is also experience with exiting companies, as seen by Dollar Shave Club, FameBit, and HelloSociety.
However, it remains true that investing into blockchain and ICO markets can be a risky endeavor. Proponents note that the use reduces barriers to access, which is a great thing for those in that position. However, critics believes it can lead to more scams and fraud to those investing in the companies.
With the market seeing a credible business there, with investment experience, that could lend credibility to the market as a whole. It remains to be seen.