This first round of funding came from 71 distinct investors at an average of $3,200 to continue R&D for SPPX.IO, the “portal” that emerged last year in response to deregulation of equity crowdfunding. In Minnesota, it’s better known as MNvest, and nationally, this change is generally referred to as the regulation crowdfunding (REG-CF) exemption.
For the first time of our lifetime, founders and entrepreneurs can advertise their fundraising intentions to the general public and accept money from non-accredited investors to meet their capitalization needs. This is the basic premise of equity crowdfunding, which fundamentally transcends tech startups and potentially touches every mom and pop main street business out there.
Technology companies may be the last genre of business to benefit from equity crowdfunding (for a variety of reasons).
What David Duccini is doing with SPPX.IO involves a combination of “portal” which is the old-school verbiage being used in Minnesota to describe an online service that allows registered business owners aka “issuers” to host an “offering” for capital raise of any amount up to $2m annually under MNvest rules; Federally (Reg-CF) that cap is $1m, and under SCOR it’s $5m.
Around the time SPPX.IO campaign began, we described it as a Minnesota moonshot given the gravity of impact potential. That viewpoint is wholly reinforced today as the venture moves forward while demonstrating execution in terms of its own fundraising milestone here, as well as successfully navigating the legal minefield that comes with being a pioneer in the space. Not to mention the endless ambition of Duccini to revolutionize the economics of business across the region, where no element of financing is off limits.
“Our crowdfunding raise used SAFE or Simple Agreement for Future Equity instrument which is a form of “cap ($10m) and discount convertible note” that is a non-interest bearing, non-voting class of security that entitles it’s holder to convert into common stock at a 20% discount in the future when certain events occur such as any funding round over $1M,” says Duccini of the note. “This gives us some flexibility with regard to management as well as valuation and capitalization going forward.”
To date, SPPX.IO has only hosted a few campaigns since launch: Rustech Brewing recently achieved their minimum raise of $50k for a new brewery in Monticello, while the Farm and Vine restaurant concept has been struggling and decided to make a pivot. Local tech startup CheckNGN has filed to offer on SPPX.IO, but yet to commence their campaign.
Silicon Prairie Online is a DBA/trademark of Silicon Prairie Portal & Exchange, LLC — which is a subsidiary of Silicon Prairie Holdings, Inc; Silicon Prairie Holdings, Inc. is pursuing a number of paths under the umbrella, from hosting 3rd party offerings to partnering “portal as a service” with private business in other states, including Colorado (CFEX.CO), Iowa, and Wisconsin.
Duccini says that ultimately, the Silicon Prairie Registrar & Transfer is the new entity that will own and manage an SEC regulated “Stock Transfer Agent”,which is part of the master plan for investor relations and service model — facilitating authentic communications (such as voting between owners and shareholders) using the blockchain.
SPPX.IO also recently took a 1/3 stake in a new MNvest portal called Land.MN which is targeting the real estate market in Minnesota.