Science Blockchain Current Incubation and Investment Strategy
Now that we’re a few months into operating Science Blockchain, we wanted to share our current thoughts on incubation and investment strategy in the blockchain space. We deeply value our token holders and want to be transparent with the methodology behind our approach to this platform and plans for the future.
Science Blockchain was formed with the idea of incubating and investing in best-in-class emerging companies building on blockchain technology. We believe that blockchain is a foundational technology, meaning that it has the ability to disrupt not only the way businesses operate, but the way that society is structured. Ultimately, this means that many of the most valuable companies in the space will be built over a span of years — or even decades. However, and in some ways diametrically opposed to this long term view, the pace of innovation and the speed with which promising companies are emerging and taking advantage of the funding opportunities presented by the ICO mechanism is stunning.
As Science Blockchain’s reputation has grown in the blockchain investment community, we have been presented with many near term opportunities to invest in the pre-ICO rounds of what we believe are promising projects that may provide significant benefit our token holders. Our unique token structure provides SCI token holders with the ability to receive 70% of the tokens that Science Blockchain receives when making these ICO investments, which they likely would not get access to on their own — especially not at the favorable terms on which we are often investing. Furthermore, the 30% of tokens that are retained by Science Blockchain may increase in value enough to not only offset the entire original invested amount, but also to put more capital in reserve for future investments and incubation projects.
Against this background, my partners and I — in conjunction with our growing and very talented team — have developed an investment and incubation plan that can be broadly broken down into three buckets.
First: Incubation. This is the most hands on and complex involvement with a portfolio company. We partner with the founding team to build a business from the ground up, and the process can take months or even a year or longer. We have to have the strongest belief in the team, the concept, and the business model, because we are embarking on a long journey with incubated companies. They get the lionshare of our attention, and consequently, we generally earn considerable equity and token stakes. We believe in the long run, our largest returns are likely to be generated by incubated companies.
Second: ICO Coordination. The Science Blockchain token (SCI) is one of the only tokens designated from inception as a security. Our ICO was conducted in accordance with US securities laws and issued under exemption from registration under Reg D in the US and Reg S internationally. Practically, what this means is that we conducted one of the most complex token issuances ever, with what may be the most complicated token (in terms of its functionality and economics) ever, and targeted accredited investors both domestically and abroad. We built up an amazing network of crypto investors while gaining far more experience than most in terms of understanding the ICO process. This led to the unexpected (but in retrospect not surprising) result of heavy demand for our involvement from somewhat more mature companies seeking to do an ICO and needing help navigating the process, but not necessarily needing full incubation.
This is the second most intensive involvement with a portfolio company. The services provided here may include assistance with white paper drafting, token economic design and allocation, token sale structure and timing, and sales and marketing support among others. We are highly selective when agreeing to engage with a portfolio company in this fashion, because each takes significant human resources in addition to capital, and thus presents ongoing opportunity cost. These tend to be time intensive projects generally carried out over a period of 1–4 months and Science Blockchain generally receives a significant percentage of total tokens issued by the portfolio company in its ICO, depending on the extent our involvement.
Third: Investments in ICOs. Science Blockchain has been presented with hundreds of token sale investment opportunities. We’ve carefully analyzed what we think are the best and most successful token designs and token sale models, participating in only a fraction of the opportunities offered to us — the ones we believe are likely to yield the greatest return for our token holders, on both a risk- and time-adjusted basis. Our participation in these ICOs directly has allowed us, in conjunction with our legal counsel, to create what we believe to be a set of best practices for token sales that we encourage our other portfolio companies to follow. Ongoing analysis of, and investment in, ICOs on an arm’s length basis allows us to continually update and refine best practices and standards for our ICO Coordination and Incubated portfolio companies in the rapidly evolving crypto landscape. By being an active market participant, we have the chance to see what the market is responding to at any given time, and adjust our recommendations for our portfolio companies accordingly. We believe this approach will yield superior long term results for all of our portfolio companies, while delivering a broader portfolio of tokens to our SCI token holders in the near term.
Given the rapid nature of change within the blockchain and crypto asset ecosystem, our methodologies may, and in fact likely will, evolve over time. We’ll endeavour to provide updates as they do. We are unlikely to provide information about investment specifics — i.e. amount invested in a particular company or ICO etc. — as this information is often confidential to the portfolio company. Additionally, because we are a security, our communications — and the content thereof — will be made in accordance with applicable laws and regulations. Also, for this reason, we are unlikely to be able to provide meaningful answers to individual investor questions. However, we do want to hear all investor questions and concerns, as they help guide us in the public channel communications we issue. So please sign up for our email or telegram groups to receive updates. You can also find all current news and info at: https://www.science-inc.com/blockchain.html
Thank you for your ongoing support.
Greg Gilman and the Science Blockchain Team.
Disclaimer: This does not constitute an offer to sell or the solicitation of an offer to purchase the Science ICO tokens, nor shall there be any offer, solicitation or sale of the Science ICO tokens in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Science ICO tokens have not and will not be registered under the Securities Act or other applicable state securities laws, and may not be offered or sold in the US absent registration or pursuant to an exemption from registration requirements of the Securities Act and under applicable state laws.
Science ICO tokens were offered on a limited basis to a maximum of 99 accredited US investors under exemptions from registration with the U.S. Securities and Exchange Commission pursuant to Regulation D, Section 506(c) and Regulation S of the Securities and Exchange Act of 1933, as amended (the “Securities Act”), and the rule promulgated thereunder.
Certain statements, projections or other estimates herein (including estimates of value, returns or performance) are forward-looking statements and are based upon certain assumptions. Other events that were not taken into account may occur and may significantly affect the analysis. Any assumptions should not be construed to be indicative of the actual events that will occur.