This Silicon Prairie Review will help you learn more about Silicon Prairie's investment offerings, including how the alternative investments on Silicon Prairie are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.
Silicon Prairie is a Minnesota-based investment crowdfunding portal founded in 2016 by David Duccini. Silicon Prairie is a Title III Funding Portal (Reg CF) registered with the SEC and governed by FINRA, and they also as a broker-dealer to offer additional services, including a white-label fundraising platform. Silicon Prairie also offers consulting services and investment banking services to companies. Silicon Prairie is distinguishing themselves among Title III funding portals with low minimums (as low as $25 for some investments), which is quite low even among crowdfunding portals.
Types of investments Silicon Prairie offers
Silicon Prairie offers investments in startups and growth-stage companies. Earlier-stage startups are generally riskier, though may offer the potential for a greater return in the long run (that is if they return anything at all). Silicon Prairie’s offerings span a wide range of industries and verticals, from real estate to pharmaceuticals.
What do you get when investing with Silicon Prairie?
Companies raising money on Silicon Prairie use a variety of security types, including debt, equity, and convertible notes or SAFEs. Details vary by offering, and prospective investors should be sure to review the offering documents to make sure they understand the specific security they’ll be receiving.
How does Silicon Prairie make money?
Silicon Prairie does not charge any fees directly to investors. Instead they charge the companies raising money on their platform various fees. For example, Silicon Prairie charges companies $500 for a 6-month “test the waters plan”. This allows companies to accept indications of interest in their investment opportunities and gauge investor interest from the public. When companies kick off a formal Reg CF offering, Silicon Prairie charges a $1,000 onboarding fee, as well as 3-7% of the total raise.
Potential returns and cashflow
Investments on Silicon Prairie are high-risk investments in startups and growth companies. There are no interest or dividend payments. Generally, it is safest to assume you will not be able to resell your investment to another investor.
Breadth of offerings on Silicon Prairie
As of this writing, there are about 21 active investment offerings, as well as several other “testing the waters” campaigns to solicit initial investor interest.
Regulatory framework and due diligence expectations
Silicon Prairie is an SEC registered Title III Funding Portal. That means they are subject to a range of rules and obligations around investor education and due diligence. All developers offering Reg CF investments on Silicon Prairie will have been through background checks of key officers and owners, and there are clear links provided to the relevant SEC filings made by the issuer.
Prospective investors also have access to an online channel for asking questions of the issuer (and viewing answers of prior questions from others).
Silicon Prairie is also a registered broker-dealer. Broker-dealers are subject to specific due-diligence requirements to ensure an investment is “suitable” for their registered customers, or they can face fines and civil action. (That does not of course provide any guarantees about investment return or performance!)
This review was first published on 26 July 2022.