Science Blockchain ICO Launch
We’re excited to announce the launch of the Science Blockchain ICO. This is the first Incubator ICO to enter the market and Argon Group will be advising on the ICO.
The sale will be held at science.tokenhub.com
Startup incubator Science, which invested in companies such as Dollar Shave Club, is launching a bitcoin-related incubation program.
The program, Science Blockchain, will raise capital in a new way for venture capitalists, through an “initial coin offering.” ICO s have been used recently by startups and groups such as programmers as a way to sell digital tokens that can be cashed in later to receive a product or service from the company.
The firm is targeting about $50 million to $100 million in the offering, according to people familiar with the matter.
Los Angeles-based Science is using its ICO–which it plans to launch in pre-sale for select investors only on Sept. 18 and release to the public on Oct. 2–in a different way.
Science Blockchain’s ICO, which the firm described as the first incubator to raise funding through an ICO, will enable holders of its tokens to make money in two ways. Holders of the incubator’s tokens also will receive tokens in the incubator’s bitcoin-focused startups, which could themselves carry out ICOs. In addition, a fixed percentage of returns when the incubator’s portfolio companies are acquired will be used to buy back incubator tokens on the market.
“We believe that using an ICO as a vehicle and methodology for raising capital is the right way do it,” said Mike Jones, founder and chief executive of Science. “It allows us to practice what you preach.”
The Science ICO is designed to comply with SEC regulations, so the firm will only allow accredited investors to buy tokens in the ICO, which is being managed by investment bank Argon Group, Mr. Jones said. The offering will be done under Regulation D in the U.S., which allows 99 or fewer investors, and Regulation S for foreign investors.
At this stage it isn’t clear whether Science’s ICO and the investment in the tokens of its portfolio companies will result in more return on investment than the traditional venture capital equity approach, but the firm believes it should be just as lucrative.
“It’s a little hard to say,” said Mr. Jones, who is announcing the incubator Wednesday at the Fintech Week conference in San Mateo, Calif. “I would imagine our ownership and the incubator’s levels look similar in the crypto space.”
With the recent run-up in the price of bitcoin, interest in the virtual currency and blockchain-related startups has grown among venture capitalists. Bitcoin exchange startup Coinbase is on the verge of closing a large funding round at a $1.5 billion valuation, WSJ Pro previously reported.
Another investment firm, Blockchain Capital, held an ICO in April, raising $10 million.
Science will continue to run its existing incubator, which focuses on mobile technologies and mobile entertainment.
The Securities and Exchange Commission recently issued a statement indicating its intention to regulate ICOs, which could slow the rush to the offerings if the agency’s rules dampen their appeal.
View article here Wall Street Journal