In Italy attention to equity crowdfunding is growing and more and more investors are turning their commitment to “bet” on new startups to diversify their portfolio; in fact, by detecting small shareholdings in start-ups, interesting returns and tax benefits can be obtained. This is thanks to the budget law that made the instrument more attractive, raising tax breaks for those investing in startups and innovative SMEs from 30 to 40%, up to 50% in the event of total acquisition of the share capital (provided that investment is maintained for three years). In particular, the incentives apply in the case of both direct and indirect investments (made for example through collective investment savings organizations and other companies). So, for example, on an investment of 1 million, with the tax rate up to 40% there is a maximum tax saving of 400 thousand euros per year, almost half of what was wagered.
But let us now make a small digression on what exactly crowdfunding consists of and in what types it is divided. Equity-based Crowdfunding is one of the four existing Crowdfunding models and its development has been favored, after the 2008 financial crisis, by the increasing difficulty of companies to access credit. The Equity model envisages that the loan takes the form of risk capital: the lenders obtain in exchange shares of the company with equity and administrative rights.
Italy is the first country in Europe to have adopted legislation specifically dedicated to equity crowdfunding and thanks to the CONSOB Regulation it is the first country in the world to have adopted an organic implementation legislation (anticipating the SEC in the United States). With the updating of the regulation, published by CONSOB itself in January 2018, the authorized platforms can also publish capital raising campaigns for all the qualified bidders such as Small and Medium Enterprises.
But let’s see the models. There are 4 types of crowdfunding:
• Donation-based: the Donation Crowdfunding model is widely used by non-profit organizations and organizations that appeal to the public so that this financially supports a social, ethical or philanthropic cause. The donor in this case does not get any material reward from supporting the cause.
• Reward-based: this is the most widespread model, in Italy and in the world, thanks to its ability to remunerate, albeit symbolically, the supporter with emotional rewards or materials normally of lower value than the donation. The declination of this model is in highly creative and experimental sectors such as films, books, music albums, but companies that produce physical products can also be financed and often those who invest in these projects receive the product once they are ready for the market.
• Lending-based: the evolution of crowdfunding has also led to the emergence of private lending, also called peer-to-peer. This is a model that allows private savers to lend monetary resources to subsidized rates of use and use, without therefore having recourse to traditional intermediaries such as banks.
• Equity-based: the last frontier in the field of crowdfunding is the declination of the logic of financing from the bottom to the corporate capital. In the Equity Crowdfunding model, innovative Startups and SMEs can contact the public to obtain the capital needed to start their entrepreneurial activity and in this case the supporter-financier acquires equity securities in the company capital.
The numbers of crowdinvesting (the sum of equity and lending crowdfunding) at the end of June 2019 showed significant growth: total funding exceeded the threshold of 500 million euros and there are 35 platforms dedicated and authorized to meet demand and the offer, that are marketplace in the FinTech sector, expressly designed to facilitate fundraising. And for those wishing to diversify their portfolio by investing in startups and SMEs, it should be noted, finally, that CONSOB exhibits on its website the list of managers authorized to carry out the activity. Before investing your money it would be a good idea to check if the platform you are operating on is on this list.