The founders of startup incubator Science, Inc have announced the formation of a new incubator, “Science Blockchain,” that will allow investors to participate through an ICO (Initial Coin Offering) in a focused effort to operationalize, grow and monetize Blockchain technology and its applications.
According to Science Founder and CEO Mike Jones, “There’s no question Blockchain is a transformational technology that can disrupt the way nearly every business or financial transaction takes place.”
“Yet it’s still at an early stage of its development and so represents a major growth opportunity for both entrepreneurs and investors, especially if they’re given structure, guidance, resources and a high standard of governance of the kind that the Science, Inc. team has a track record of providing.”
The structure of the Initial Coin Offering will allow investors a chance to participate in any upside two ways: first, via a direct distribution of tokens issued by portfolio companies to incubator token holders, and second, by using a fixed percentage of returns from the sale of portfolio companies to buy back incubator tokens on the market.
While not the first investment vehicle to offer investor participation via an ICO, Science Blockchain is the first incubator to provide an investment vehicle to offer investor participation, although there have been previous ICOs. The company said it plans to take a leadership position in this emerging marketplace with regard to structure, transparency, and compliance.
“We wanted to put our money where our mouths were out of the gate,” said Jones, adding, “and we also see a major opportunity to help set a new bar for ICO’s 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 (SEC). We welcome and expect a certain degree of disruption, but at the same time, we also understand that having the greatest positive impact for investors and companies means working within existing regulatory regimes and demonstrating just how important – and valuable – this technology can be.”
The ICO offering is being managed by The Argon Group, via its subsidiary Argon Investment Management LLC, under the Regulation D Section 506(c) exemption from registration issued by the U.S. Securities and Exchange Commission. More details around the timing of the ICO and the issue of the Offering Memorandum will follow shortly.
The investment focus of the incubator will be companies developing and deploying Blockchain technology, in particular those that develop protocols that help companies ICO and help the ICO market mature.
“This is a young but rapidly-growing space,” concluded Jones. “A big part of our responsibility here to our companies – and, frankly, the technology – is making certain we act as responsible stewards, both of our portfolio companies, and our investors’ trust. That means establishing and adhering to best practices in a category that doesn’t have them – yet. It means taking a leadership role, but we’re confident that done right, this is going to be enormously positive not just for our companies and our investors, but for the whole sector.”