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An overview of crowdfunding in Italy

An overview of crowdfunding in Italy

[written in collaboration with Ivana Pais, Cattolica University, Milan]

“From 10 years to 10 months”. This, according to Alessandro Fusacchia, is how much he would accelerate the implementation of the crowdfunding provisions of the the Decreto Sviluppo and so get Italian legislation in step with US developments under the JOBS Act. For once, it looks like Italy is keeping up with times. But this haste is not without its critics their fear being that the Italian crowdfunding market is not mature enough.

So what is the state of crowdfunding in Italy?

According to a brand new report, Analysis of Italian Crowdfunding Platforms, there are 16 active crowdfunding platforms, and 5 more are in their launch phase.  Eight platforms are reward-based and five are donation-based; two are social lending platforms and only one platform can be included in the equity-based model. Twelve of these platforms took part in the survey that led to the report.

The longest established platform is ProduzioniDalBasso (launched in January 2005), followed by Smartika in 2008 (which launched as Zopa Italy), Kapipal in 2009 and Prestiamoci in 2010. However the boom year so far for Italian crowdfunding was 2011 with the launch of Shinynote, Eppela,, Retedeldono and SiamoSoci, followed by Musicraiser, Starteed and Crowdfunding-Italia in 2012. The platforms are based mainly in Northern Italy, with only one platform based in Rome and one is based abroad, in London. The target market is national, with the exception of two platforms that position themselves on the European market.

Since their launch, Italian platforms received a total of 30,000 projects, of which 75% have been on social lending platforms. Approved/published projects number 9,000 (of which over 5,000 were on social lending platforms); and almost 2,500 projects were funded.

Success rate, on average equal to 28%, varies from 7% in equity-based crowdfunding to 16% in reward-based crowdfunding to 35% in social lending. As for donation-based crowdfunding, platforms report an average 74% success rate, however for many platforms collected funds go to projects holders regardless of target achievement, that is to say they operate a “keep it all model”.

The overall value of funded projects is 13 millions Euros, collected mainly on social lending platforms (78%) and equity-based platforms (15%). Only 7% of the total value of projects can be attributed to reward-based/donation-based crowdfunding.

Suggestions that the market is still immature may be right: with more than half of Italian crowdfunding platforms were founded after 2011 and the sums raised still relatively small in comparison to the billion and a half dollars raised via crowdfunding at a global level.

But first movers have gathered significant expertise, and the dynamism over the last months could lead to rapid changes. Reward-based platforms are growing at the fastest pace, in contrast with the global trend, where the equity-based category shows the fastest growth rate.

The general wish of the founders of reward-based platforms is for the introduction of guidelines  particularly in relation to legal and fiscal aspects, as well as tax relief on donations to private individuals.

The complete report has significantly more detail and is available here.

Social Media Week Glasgow – The Report

Social Media Week Glasgow – The Report

As many of you know the first Social Media Week 2012 has just taken place with London as the UK host city and as part of that we attended and delivered an event on Thursday evening called Socially Scotland, alongside Inner Ear and KILTR. The event was in part sponsored by McClure Naismith and made all the sweeter thanks to the generosity of Tunnocks, WEST Beer and the Ayr Brewing company. Our sincere thanks to you all.

Our part in the evening was to give an overview of the scope and impact of Social Media Week 2011 in Glasgow.

The curation of an event like Social Media Week is a significant undertaking. Even though it is a crowdsourced event, and most of the events are created by participants, there is still a great deal of time, effort and worry involved in making it happen.

When we started the process of pulling together the Glasgow end of that with our colleagues at New Media Corp pretty much no-one we spoke to had heard of it despite it already being a colossal global presence. This meant that when we were speaking to potential sponsors and partners we had to do a lot of explaining. What was particularly challenging was to explain that we had little idea who would take part, the number of events, the nature of event hosts, because of the crowdsourced format. Most similar events are highly targeted and base their offer on a highly defined set of characteristics. Social Media Week is not like that and what has gone before may well not reflect the nature of the next iteration. So for those that did get on board, it was a leap of faith and we salute their courage and vision. None regrets it. Some that didn’t probably do.

That said, we felt it was well worth trying to understand a bit more about what happened last September. Who came, what they covered, and capture for posterity some record of a week that for us will remain long in the memory and stand as an endorsement of something we are very proud of, as should all those people that made it happen.

To do that we collated a good deal of quantitative data, ran a review evening for some more qualitative feedback, and completed the delivery of some legacy projects for Creative Scotland that formed part of their investment in the week’s success.

We have drawn that material together into the form of a report that we now share with you, because it was your week as Alan Bisset put it in the promotional video.

We hope you enjoy the report, find it interesting, share it, comment on it and look back as fondly as we do to “That Week” in September 2011.

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