Equity-based Crowdfunding in the Italian Experience

The needs of strategic services, prevalence of investments in intangible assets and difficulty in finding the financial resources to support the development plans are the main factors that hinder recourse by start-ups to traditional sources of financing, getting them to refer to specialized investors, typically, venture capitalists, who request, in addition to financial resources, also financial services, like guarantees, and strategic services, for example, for internationalization, promotion, and so on. In the United States, an alternative form of financing to the specialized investors has become popular: crowdfunding. This is financing in various forms by a multitude of subjects. In Italy, even responding to the constraints laid down by the MiFID regulations, but only nation in Europe, the Legislators have qualified the phenomenon of start-up and regulated the equity-based crowdfunding as an alternative method that allows enterprises to intercept equity from the savings. The aim of this chapter is to establish whether the Italian start-ups consider the equity-based crowdfunding favorably for their needs of financial resources and other services, and if this attempt by the Legislators to regulate a typically informal phenomenon can be considered effective. In addition to providing a framework of the structure and financing strategies for innovative start-ups, this chapter will also allow understanding what are the prospects and limits of crowdfunding developing in Italy. Specifically, whether the current legislative regulation may be a model to be exported to other countries.