JAN. 2018 V OL. 5 ISS U E 157 R E P O R T Q&A with Peter Pham Co-Founder, Fundraising & Business Development of Science, Inc. Principle Series: Please join Family Office Insights for Science, Inc. s luncheon on Thursday, January 18 th at 12PM. If you care to join us, please email admin@familyofficeinsights.com. Family Office Insights sits down with Peter Pham, Co-Founder, in charge of Fundraising & Business Development of Science, Inc. to discuss how the already successful incubator is broadening it s scope into blockchain, the launch of their trading fund for blockchain and cryptocurrency assets, as well as their forthcoming mining operation. Family Office Insights is a voluntary, opt-in collaborative peer-to-peer community of single family offices, qualified investors and institutional investors. If you care to learn more, and perhaps join the community, you are welcome to visit us here at FamilyOfficeInsights.com P AGE 1
Q: Tell us about your background and Science, Inc. A: I ve been building Internet companies my entire career ranging from the enterprise to the consumer space for the last 15 years. My first big success as an entrepreneur came in the mid-2000s where I helped build Photobucket as one of the 5 founding team members leading growth and corporate development, which we then sold in 2007 for $300M to MySpace. I then co-founded BillShrink, which was acquired by MasterCard. I spent some time in venture capital investing with Trinity Ventures, who were backers in Billshrink and Photobucket. I realized that being hands-on building the product was what I preferred in to do and what I envisioned my career to be. My friend, Michael Jones, the CEO of Userplane, the first messaging platform on the web which he sold to AOL, and I decided to co-found Science Inc. 6 years ago, believing that being hands-on at the inception of a company in the first 12-18 months is crucial in making the best decisions to be successful. The first year of a start up s life is make or break and we knew that we could be there to help them with that. When we invest in the companies, there s a higher success rate, which we were proven right with one of our incubated companies, Dollar Shave Club. We built that company in our offices with the CEO for the first 14 months and then sold it to Unilever for $1B three years later in 2016. In addition to Mike and I, The Science Inc. team includes Gregory Gilman, Co-Founder and General Counsel, and Tom Dare, Co-Founder and CFO. We all have extensive experience in building and operating companies and touching all areas of business, product, marketing, fundraising, strategy, and growth with successful exits. We all understand the consumer space really well and have a couple dozen companies in our current roster of incubating companies including Wishbone and Yarn, the top 50 grossing app in the US. At Science Inc., we think building companies is part art, part science. The art is the concept and idea, where as the science is the building blocks of the company, the data, analytics, and financial systems of a business. We have a tremendous network of tier 1 investors like Benchmark, Greylock, Andreesen Horowitz who have already invested $400M into the companies we incubated the last 6yrs. We also manage a traditional $75M venture fund with institutional endowments, family offices & LP's like Marc Andreesen & Chris Sacca 2 of the best investors in startups. 4 years ago we spent some time in cryptocurrency, built the code, and invested in mining because we knew that this space would take off, including being an angel in coindesk. We believe that you have to be 2-3 years ahead of the curve to succeed. In the past year and a half, we focused on the blockchain and applied the same skill sets in building and operating companies to it. To our knowledge, we are the only incubator to set up our own SEC Reg D ICO earlier this year. In such a fragmented and volatile industry with a lot of uncertainty and illegal dealings, we knew that having our own ICO set up would be an important part of blockchain. We are not only building the startups, but we have the connections and access to them as well. We are building a large scale mining operation for bitcoin as well as our own exchange for a coin base competitor. We are helping other companies do ICOs because we have done our own. We closed our incubator ICO 3 months ago & announced a few products inckuding our most notable being ICO Watchdog. It s the most used alert product for a person tracking ICOs, which is also offered as a telegram, Slack or Messenger Plug-in. We are currently working on another half dozen ICOs at the moment. We have currently raised a little over $12M to incubate in the space and build companies. We are launching a mining operation, which we believe is one of the core pieces of how cryptocurrency works and is a great hedge. We have also built our own 24/7 buying and selling trading desk to manage our own crytocurrency and portfolio. For us, we have so much institutional knowledge that by opening up this Fund and letting other investors to participate is to share that knowledge. P AGE 2
Q: What investments will you be presenting to investors? A: We have 2 investment vehicles that we are presenting at this luncheon. The first is the Crypto Fund that will expose potential investors who want exposure in crypto and an actively managed portfolio, as well as, those that want to buy coins and invest in ICOs. The second is the mining operation where we are giving investors 100% net profit until they get to 1x, then 80% for 2x, and 20%for the life of the mine, it can yield 13x depending on the price of bitcoin over the years & is a great hedge in the volatility of BTC. Q: What are some challenges you face in your industry? A: The challenges are still unclear as this is a new industry, but I think that by the end of this year we ll have a better picture of how this product is used and who the users are. The big questions here are, does any of this matter and will it be used at scale? There are companies that are full of scam coins that are supposedly worth a billion dollars. You have to read the right papers, talk to developers, understand the companies and see if there s a viable community behind it. I am excited that the SEC continues to pay attention to this space, in turn, making it feel safer, which will naturally bring more money into it. The massive institutional markets are not coming in yet, but it s still early. With Goldman Sachs coming into the light about it and Jamie Dimon recently retracting his statement of calling bitcoin a fraud, which shows that this space is being legitimized with more liquidity. This is all apart of the ecosystem. Q: How are you different from your key competitors? A: Our key differentiation is diversity in touching all parts of the ecosystem in building companies and having a mining operation. I am unaware of any other Fund that actively operates a mining operation at the same time. Everyone has their own value, but ours is having knowledge in all parts of the ecosystem in a new industry that is full of scams and untrustworthy people. How can you trust someone in this space to manage your money if they don t have a track record of managing other people s money effectively, and for a significant period of time? There s not a lot of people in the crypto space with the experience of having managed other people s money, building companies, operating them, and/or having successful exits. They are also young kids who just got lucky with their own investments, but it s different when you have to manage your own thousands of dollars, compared to millions of dollars of other people s money. Science Inc. comes in as an operator, one who has built and sold companies, who understands the technicality of the space, is an active thought-leader, and also building companies within it. The intricacies of every token, coin, and ICO are things our team lives and breathes. P AGE 3
Q: How are you changing the landscape in your industry? A: We are creating and incubating ideas, as well as, helping to build the companies the right way. Being a part of the companies in the earliest stage in an industry that s a year old allows us to have more information than anyone else. For instance, with Dollar Shave Club, we knew Stripe would be a major payment player because we saw all the data and transactions that were coming from Stripe. With that level of access to information, we are able to make the best decisions and investments. Q: How much capital are you looking to raise? Who is your ideal investor? A: The reality is that we like bigger investments from a Family Office, typically starting at $1M. We are not setting a cap on this raise as we re already trading Millions of our own money. Our perspective has been that we are already doing this, so if anyone wants to jump on, that s cool, but we aren t waiting, we re already trading and mining. Q: What is your mission? A: Our mission is to find investors to invest in this space. The more relationships we have and the more investors we have the better. Managing more money gives us access to more information, which is more leverage that we can have to push in this space. Q: What is next for you? A: We re going to be building and doing the first ICO for one our incubator companies in the next quarter. One of the main things we worked on for the past 6 months was a structure around trust and ability to do things around coins, assets, tokenization, and liquidity in the global market. There s a lot of innovation happening, and in the next quarter, we are excited to announce it. P AGE 4
Peter Pham leads the effort to raise money for Science incubated companices, which has totaled $400M. Previously as an operator, he has helped build companies like Photobucket as employee #5 leading growth & corp dev leading to its $300M acquisition to MySpace as well as co-founder/ceo of BillShrink, which was acquired by MasterCard. He is also an angel/advisor to companies like Nextdoor, Ring, & Medium. For more information, please reach out to Peter at: talia.rosenthal@science-inc.com P AGE 5
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