The leading Crowdfunding consultancy

Equity Crowdfunding in Italy – Six months on

It’s been 6 months since the CONSOB Regulation enabling equity based crowdfunding was introduced in Italy. This was a significant event as it made Italy the  first country in Europe to formally introduce equity-based crowdfunding into the national legislation.

It seems that there has been a great deal of debate and apparent activity without a great deal actually being disclosed or indeed to show – “tanto fumo e niente arrosto” as Italians would say (“all talk and no action”). We can leave the issues of an apparent lack of transparency for another day but it is right and proper to ask – after six months exactly where are we with equity crowdfunding in Italy?

The regulation officially went into action at the end of July and inevitably, before we could expect to see offers popping up on the web and investors investing millions in them, there needed to be platforms in place to handle the offers. According to the Regulation, embryonic platforms need formal approval to operate via an application to Consob, the national financial authority, in order to be authorised and included in the portal owners registry. Who can open a platform? Individuals and institutions who meet the integrity and professionalism requirements set by Consob, who can be divided into two groups – those seeking registration for the first time, who are required to undergo a registration process, and those that already have certain financial approvals in place – like Banks and financial intermediaries – who can be placed on a special section of the registry. This later group must simply inform the CONSOB of their interest in becoming crowdfunding platforms. Such bodies are in effect pre-approved but they must wait to be officially included in the special section.

Perhaps surprisingly, the first equity platform to be included in the registry was one that had to complete the full approval process and is called StarsUp, listed in  October 2013. This was followed by Unicaseed, a platform operated by Unicasim, a financial intermediary firm, who curiously enough had to wait a bit more to see its portal first in the special section of the registry.

So far so good, two platforms registered, question is how are they doing? Unicaseed, as we announced, launched their first offer on the 31st of December with Diaman Tech Srl, a spin-off of the Diaman Holding group. The innovative startup is developing a financial analysis software and it’s seeking €147,000 (18.92% equity). The offer is currently under due diligence from an institutional investor until the end of this month. Starsup launched this week, with Cantiere Savona Srl, a young startup developing an innovative and sustainable concept for yacht. The three young founders are seeking €380.000. The offers will close after a period of (respectively) 3 and 4 months, therefore between end of March and end of May we will know the fate of these two pioneer experiences.

We also need to acknowledge the pioneering platforms, who are to be applauded for their innovation. Whilst they may not perhaps be blazing a trail, they are certainly breaking new ground and setting the tone for those that follow. And they are doing so with the help of the crowd. Leonardo Frigiolini, CEO of Unicaseed, told us that they are learning a lot from the people who have started using their portals and who are sending lots of suggestions for improvements, that Unicaseed team are carefully taking into account. For a traditional brokerage company such as Unicasim, this is a totally new way to operate, and whilst crowdsourcing may seem familiar to many of us, for firms in the established and conservative world of financial service we should applaud their courage and vision to adopt such novelty into their operations. Are we perhaps witnessing the beginnings of wider innovation in the traditional financial marketplace through these little things?

What is puzzling is the lack of other platforms. In the latest Analysis of Italian Crowdfunding Market (carried out with Ivana Pais) 9 equity platforms were identified as being in their launching phase, but so far only two have launched.

To try to understand what was happening and why there seemed to be such a delay we had a chat with some of the aspiring equity portal managers. What we found that key issues are – perhaps predictably – compliance issues and satisfying these requirements and translating the articles of the regulation into a real portal. It’s also worth remembering that these embryonic platforms are, in many cases, startups, and funding the costs associated with compliance can certainly take time. Many commentators in the media translate this delay into a message of “the regulation is too rigid” but the protagonists don’t always share this view, even those that are finding the approval process quite a protracted and painful one. On the question whether it’s easy to become an equity-based crowdfunding platform or not, the general answer was ‘no’ and it was generally answered with another question: Should it be? The entrance in the sector of a good number of operators (at least 10) would be positive and it would contribute to make the tool credible. However opening the process to anyone without regulations would mean to put the growth of the sector and the protection of investors at risk”, says Carlo Piras, co-founder of Starsup.

An interesting development emerged when we had the pleasure to participate at a round table organised by LUISS, the eminent University and Business School in Rome and  co-organisers of the most recent edition of crowdfuture. The meeting was to publicise a project entitled DREAM which may well have a significant impact on the emergence of equity crowdfunding in Italy. The Luiss DREAM (Diritto e Regole per Europa Amministrazione e Mercati – Law and Regulations for Europe, Administration and Markets), is the new research centre of the Law Department of the University, directed by prof. Gian Domenico Mosco. The acronym which forms the name can be interpreted in English as it is in Italian and encapsulates the aim of simplifying the legal and regulations, and one of its objectives would be to create accessible legal resources for startups wishing to collect risk capital through online portals. An interesting and ambitious project adhering very much as it does to principles of democratising capital.

As a final point to conclude this overview of the state of equity crowdfunding in Italy six months on from its enabling, we must acknowledge an example of Italian equity based crowdfunding project that decided to go abroad. It’s the case of GlassUp, an Italian startup who already completed a reward based crowdfunding campaign on IndieGoGo in June 2013. Now they are seeking to raise £100,000 (7.69% equity) on the UK-based equity crowdfunding platform Seedrs. We asked then why did they go abroad? According to Francesco Giartosio, CEO and founder of GlassUp, they felt they wanted to try an equity round where there was already a track record of successful funds. But this does not mean it’s the easiest and most convenient solution (for example, if they are successful they will have to create a UK legal entity because Seedrs only admit British startups). Whilst this could be viewed as a loss to Italy it should be remembered that such a move doesn’t exclude the possibility of another round on an Italian platform at some point in the future.

So, a lot of irons in the fire in a relatively short period of time. But, as it’s true for the Eternal City, democratisation of capital shall not be build in a day.

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!”.

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.

Page 1 of 212


Call: +44(0)7717 714 595

Join Our Mail List

twintangibles Ltd is a company registered in Scotland with company number SC397987. Registered office is Blue Square House, 272 Bath Street, Glasgow, Scotland, G2 4JR

Correspondence Address is:
twintangibles, Blue Square House, 272 Bath Street, Glasgow, Scotland, G2 4JR