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Equity Crowdfunding at the ready in Italy

The first Italian equity-crowdfunding offering was announced last Friday. DIAMAN Tech Srl , “innovative” start-up, was presented by the portal Unicaseed,  the first financial intermediary to be authorised by CONSOB to the management of an equity crowdfunding portal. This follows the enactment of legislation to make equity crowdfunding legal in Italy.  At the moment, only one other equity crowdfunding platform, Starsup, has been included in the CONSOB register but it is yet to publish any offers.

Diaman Tech S.r.l.  develops financial analysis software and it plans to use the fundingto promote its product on the market. Umberto Piattelli, of the law firm Osborne Clarke, acted in an advisory capacity to ensure compliance with all legal aspects and regulatory frameworks in  preparing the offer  for equity crowdfunding. “It’s been a really interesting experience, through which all participants have played a ” pioneer” role in this new regulatory standards, putting into practice the provisions of Consob Regulation no. 18592 and demonstrating that this type of collection is not only theoretical“, said Mr. Piattelli.

It’s certainly a big innovation and the first Italian example of a limited liability company creating a class of units which establishes differentiated rights for certain shareholders. This has been made possible by the adoption of the Law 221/2012 that introduced crowdfunding in Italy.

So not only was Italy the first country in the world to create specific legislation enabling equity crowdfunding,  it is also the first to have published an offering of capital in accordance with the adopted rules. Fact should not be underestimated, since in many EU countries there is regulatory uncertainty or they’re waiting for the adoption of a regulation by the competent supervisory authorities.

Now we wait to see what the “crowd” thinks of this offer and if they’re ready to such an innovation. The latest report on the Italian crowdfunding market highlighted the fact that there is still a low awareness of crowdfunding in the country and that the offer might be outpacing the demand. It’s true that the passage of the regulation on equity-crowdfunding has provided a boost to its awareness in Italy, and for the first time crowdfunding went mainstream, being discussed on newspapers, radio and even TV.

Certainly the announcement of the offer was extensively shared and discussed on social media, newspapers and blogs. But we wait to see if words and likes will actually translate into capital.

Italian Crowdfunding Market: Fast and Furious. Results of the latest Analysis of Italian Crowdfunding Platforms

After exactly one year from the first edition of Crowdfuture, the Italian crowdfunding community met again in Rome last Saturday. Five tracks with 45 speakers came together to explore and discuss  the,  still emerging but already disruptive,  phenomenon of crowdfunding. It was also the opportunity to present the updated edition of the “Analysis of Italian Crowdfunding Market”, to date the most complete report on the sector. Ivana Pais, from the Cattolica University, and I presented it during one of the afternoon seminars, in front of a very active and curious audience (you can find the slides here) and we’ve just published the full report that you can view and download for free here (only available in Italian at the moment).

Main points:

– The number of platforms has almost tripled in a year

The availability of platforms is currently outstripping the availability of suitably prepared projects: rejection rate is very high

– Half of the total value raised by successful projects in the history of Italian crowdfunding  has been collected in the last year (11 million Euros)

– There’s a clear and marked predominance of the social lending model: of the total value raised, the 80% is brought in by lending-based portals

Among the trends: localvesting, niche platforms, hybrid platforms and DIY crowdfunding

Italian crowdfunding market is growing fast but it has still a long way to go, especially in overcoming cultural barriers and norms

The Italian market for crowdfunding seems to be growing at a very fast pace.  From 16 platforms in 2012 we now have 41, of which 27 are active and 14 in their launch phase. Among the active platforms, more than half are reward-based, one-third donation- based and only three are lending-based. Among those launching, the vast majority are equity-based, pushed by the recent publication of the Consob Regulation.

Data were collected from 30 platforms. The number of projects submitted to platforms totaled more than 52,000, of which the vast majority to lending-based platforms. Of these 52,000 projects, less than 15,000 were actually published and the majority of these being reward-based projects. The cumulative value of the projects is growing but remains modest part of the overall global totals raised. This would suggest that the availability of platforms is currently outstripping the availability of suitably prepared projects in Italy. As for the success rate, it’s an average 54% in lending -based, 44% in donations and 24 % in reward -based.

The total value raised by successful projects in the history of Italian crowdfunding amounts to almost 23 million euro, of which more than 11 million has been collected in the last year. Of this total, 80% is brought in by lending-based portals, which also have the highest average value of financed projects (€ 7,892 /project). It should be noted that in Italy lending is consumer lending as commercial (to business lending) is not currently permitted.

Among the trends of crowdfunding in Italy are the growing presence of local and niche platforms and we noted also the emergence of hybrid platforms. ” Do It Yourself ” Crowdfunding is also spreading widely  too: two of the most funded projects to date in Italy have been DIY campaigns.

These trends, which in part follow global trends, have ” taken root ” well in Italy probably because (excluding hybrid platforms) they have a strong tie with the community and the territory. This appears to be a necessary aspect for a successful crowdfunding project in Italy, given an apparent lack of trust in the online world whilst, on the other hand, an  inclination amongst Italians to be very open and trusting towards people who are part of their more immediate community.

The rapid growth of Italian crowdfunding is not to be seen only from a positive point of view. The clear and marked predominance of social lending perhaps is a reflection of existing cultural norms and a willingness to  invest only in projects with a financial return. The high rejection rate of projects would seem to indicate a lack of understanding on the part of project owners as to what is required to successfully run a crowdfunding campaign.” Not surprisingly, the platforms continue to lament the lack of knowledge of crowdfunding at all levels. However, unlike last year,  the newer platforms in particular are very active in their educator role, organising events, initiatives and providing resources of various types on their portals. The number of events on crowdfunding has significantly increased and crowdfunding as a subject has featured on the radio and even on national TV in recent months.

However, understandably, the focus of media attention in recent months has concentrated on the equity crowdfunding model and this has had the effect of confusing many to think this is the only option available. The CONSOB regulation has had the great benefit of stimulating further debate on crowdfunding and particularly bringing it to the attention of institutions and Italian mainstream media. There’s still a long way to go. I particularly liked two comments from two of the platforms owners who replied to our questionnaire, which sum up my view on the state of crowdfunding in Italy now and its major obstacle. The first comment said “We are at an embryonic stage of crowdfunding so everything is needed for the later stages“. The other was a response to a question to platforms “Who is your main competitor?”. The answer – “the priest!”.

Crowdfuture 2013: the full programme

Crowdfuture 2013: the full programme

Crowdfuture is less than two weeks away and the full programme is finally here! It’s well worth waiting for: 45 national and international speakers covering what crowdfunding is now and giving a glimpse into where it might go in the near future.

The day will start with Ivana Pais and Daniela Castrataro of the Italian Crowdfunding Network presenting the latest report on the Italian crowdfunding market. Last year’s report, released shortly after the first edition of Crowdfuture and viewed almost 60K times in its Italian version, counted 12 platforms. Now the number is almost 4 times as many and Italy has progressed a long way from where it was last year, not least becoming the first country in Europe to create specific regulations for equity crowdfunding. A good part of the conference will be dedicated to this subject, but before that, we will be honoured to have with us the first keynote of the day, Kevin Miller from RunRev. Kevin is the founder and CEO of RunRev, an Edinburgh based software company and makers of LiveCode, and with his team they managed to raise more than £490,000 on Kickstarter, with an excellent campaign that he will tell us about (you can read more about Kevin and RunRev here). After Kevin’s speech, 5 parallel tracks will start. One on Gamification, coordinated by Leo Sorge, will seek to explore the link between crowdfunding and Gamification. Claudio Bedino of Starteed, will tell us about the similarities between inherently gamified approaches and inner motivations of the people crowdfunding. Federico Pacilli co-founder of Baasbox, an open source software for mobile apps, and Marcello Mari social media manager at GlobalWebIndex and reporter at TechEconomy will talk about motivational design inside social networks and the relevance of the quality of big data collected to gamification processes and big data analysis, as well as in decision making processes. Finally, Marco Strano, psychologist and “cyber criminologist” will compare two psychopathologies: crowdfunder Vs app user.

The civic crowdfunding track, curated by Alessio Barollo and Tim Wright, will address this novel funding tool for civic purposes. Alessio will introduce the track explaining civic crowdfunding as a method to drive processes with the aim to create interaction between the public administration, citizens, associations and enterprises with the target of financing public works of urban regeneration. We then have a video made especially for the conference by ZUS, the people behind one of the best examples of civic crowdfunding so far, the pedestrian bridge in Rotterdam. Another video will show us Rhizomatica, a company with a mission to increase access to mobile telecommunications to people without affordable coverage or none at all. They will talk about technology for developing communities in less developed countries. Francesco Cingolani, architect and blogger, will talk about crowdfunding as an attempt to give a new social role to material goods. Finally a panel moderated by Chiara Spinelli will look at civic crowdfunding and participative budgeting, with the help of Angelo Rindone of Produzioni Dal Basso, Stefano Stortone, Emmanuele J. Pilia and Francesco Cingolani, comparing the views of experts from various fields (economics, computer science, architecture, crowdfunding) united by projects or ideas about the potential of communities (both online and offline) to develop, implement and fund projects.

Then we will have the EU regulation track, curated by the European Crowdfunding Network and the international law firm Osborne Clarke. After an introduction by Umberto Piattelli, a partner at Osborne, on the situation of regulation of crowdfunding in Europe, there will be a speech by Mattia Corbetta of the Italian ministry of Economic Development who will explain the genesis of the Regulation, why it has been incorporated into Italian law, and how it will support innovative startups and economic development. A panel will follow, a discussion between Daniela Castrataro of the Italian Crowdfunding Network, Kieran Garvey of the UKCFA, Luke Lang of Crowdcube, Carlo Allevi of WeAreStarting (Italian equity-based platform currently applying to be included in the CONSOB’s operators register), and Lionel Slusny of the European Crowdfunding Network, moderated by David Blair of Osborne Clarke.

Finally, there will be the Legal Aspects track that will look into the legal aspects from a national point of view. The track is curated by the LUISS University and will see a talk by two researchers from the prestigious university, Casimiro Nigro and Roberta Mangione, followed by another talk by Alessandro Portolano and Claudio di Falco, from the prestigious legal firms – respectively – Chiomenti and CGSH. To complete the session, a panel featuring Maria Mazzarella from Consob, the Italian Financial Authority; Leonardo Frigiolini, CEO at Unicasim, a financial intermediary who will launch one of the first equity crowdfunding platforms in Italy; Francesca Brunori from Confindustria, the Italian employers’ federation; Luca Enriques from LUISS University; and Salvatore Rizzo from the Banca Interprovinciale di Modena. All coordinated by Prof. Gian Domenico Mosco of LUISS.

Last but certainly not least, Luke Lang from Crowdcube will make a final keynote, and as one of the world’s most experienced equity crowdfunding entrepreneurs, who better to close us out in style!

 We hope you can join us in Rome on 19th October and tickets are avaliable from here.

Civic Crowdfunding, an alternative approach to growth (by Alessio Barollo)

Civic Crowdfunding, an alternative approach to growth (by Alessio Barollo)

Introducing crowdfunding to Italy? We did that with the 2012 conference. With this new edition, the goal Tim and I have set to ourselves is to put together and compare experts from various fields ( economics, computer science , architecture, crowdfunding ) united by projects or ideas about the potential of communities (both online and offline ) to develop , implement and fund shared projects. Shared among all stakeholders involved in the future of the city, i.e. citizens (obviously), administrations , associations and businesses. What we’d like to get from their contributions are visions and perspectives in order to spread participatory planning methods 2.0, of which the civic crowdfunding is part in Italy, through examples and proposals.

We’ll try to project the method in a possible future development in order to provide an alternative, and to propose solutions to unlock the creativity of the community and demonstrate that innovation may be able to support us. Francesco Cingolani, architect, blogger and one of the foremost experts and scholars of participatory planning in Europe (an example is his project Dreamhamar), will talk about this.

Sticking to the the world of architecture and collaboration, we will have a video contribution from ZUS, who have designed and co-managed one of the most interesting European and global civic crowdfunding projects, i.e the pedestrian walkway in Rotterdam, and proposing the re-use of buildings in disuse through the so called “on time” urbanism ( you will hear from their words the meaning of this) , and by doing so increase their real estate value.

However, civic crowdfunding is not aimed only to the construction of buildings, but also to trigger a social rehabilitation through the activation of social and educational projects . The dynamics of which we will talk about with Emanuele J. Pilia, critic, curator and editor in the field of architecture with a particular attention to the interactions between imaginary and cities.

And then we’ll have Angelo Rindone with us. Suffice to say he is the founder of the first crowdfunding platform in the world, Produzioni dal Basso, born even before the word “crowdfunding “, to appreciate his skills as an innovator in anticipating the times.

We must not forget the economic aspect in all this , so we invited Stefano Stortone, who is building a direct experience of the efficient use of resources through participatory budgeting, but also of the activation of processes of direct / participatory democracy, where participation ( through direct and proxy voting) is directed to specific issues and / or to projects and not to persons and political programs.

We’ll focus also on people as a key element for development, and we’ll have the people at Rhizomatica telling us about their project. They work in order to let people in developing countries communicate and create communities, by providing them with mobile technology.

Not enough? No problems, I’m not done yet. To moderate this rich group of experts, we will rely on the expert hands of Chiara Spinelli , a name you can trust when it comes to crowdfunding , who will put her experience but also his ideas to the service of the public and the panelists.

Tim and I (Alessio Barollo ) and all the speakers are ready to tell you about a new way of building cities.

Tickets for the conference are available here.

[This post was originally published in Italian on crowdfuture’s blog]

Welcome back to the Crowdfuture

After the tremendous success of last year’s event, we’re back with another edition of Crowdfuture, the biggest Italian event on crowdfunding. Crowdfuture takes place this year at LUISS University in Rome on the 19th of October.

This year’s conference will have five parallel tracks, each dedicated to a contemporary and innovative aspect of crowdfunding’s, as well as some workshops and seminars in the afternoon. Here’s an insight on what is going to happen in Rome this October.

Oliver Gajda, president of the European Crowdfunding Network, is curating the track on  European Regulation where – among others – we will have Kristof de Buysere, an expert on European regulation of crowdfunding and one of the authors of the European Crowdfunding Framework which was released at Crowdfuture 2012, and Umberto Piattelli of Osborne&Clarke, a law firm extremely active in European crowdfunding and first confirmed sponsors of the event.

The LUISS University, logistic partner, are curating their own track on the legal aspects of crowdfunding, which will focus particularly on the situation in Italy and coordinated by prof. Gian Domenico Mosco. Contributions will come from a variety of institutional representatives who will focus their attention on the legislation recently implemented in Italy and other issues regarding behavioural finance and the role of crowdfunding in economic development.

Alessio Barollo and Tim Wright are curating the track on civic crowdfunding, one of the most interesting trends in the industry at present, and they will have with them – among others – Angelo Rindone, of Produzioni dal Basso, first crowdfunding platform in Europe born in 2005, and Francesco Cingolani, blogger and designer.

Crowdfunding can successfully employ gamification techniques, i.e. the use of game thinking and game mechanics in a non-game context to engage users and solve problems, and a track dedicated to this topic is being curated by Leo Sorge. It will examine examples of the use of gamification in successful crowdfunding campaigns and includes contributions from, among others, Claudio Bedino of Starteed.

Alessio Biancalana and Carlo Frinolli are leading a track entirely dedicated to open source, which will deal with the dichotomy between commissioned software development and software development for the community.

Last but not least, we are delighted to have as a keynote speaker of Crowdfuture 2013 the British equity-based crowdfunding platform Crowdcube, which will share their successful experience with the Italian public.

And that’s not all. Crowdfuture will continue in the afternoon with a vast selection of workshops and seminars. Among others, we will host a workshop on Crowdfunding & Personal Fundraising, aiming to analyze the phenomenon of donation-based crowdfunding in Italy, highlighting the peculiarities in relation to the Italian non-profit sector. And, to confirm our attention to innovative trends in the sector, we will also host a workshop on Localvesting, run by some Italian local CF platforms.

Last year Crowdfuture opened the discussion on crowdfunding in Italy and explored its core proposition and models. This year we will delve deeper into and evolving and fascinating phenomenon. Once again Crowdfuture is on the cutting edge, bringing together the most innovative aspects and trends of crowdfunding, and contributing to its further growth and development.

You can buy early-bid tickets for the conference here.

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