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Equity Crowdfunding Italian Law

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Presentation given by Alessandro M. Lerro, Lerro & Partners, Italy @SVCrowdfunding Conference April 4, 2014

Presentation given by Alessandro M. Lerro, Lerro & Partners, Italy @SVCrowdfunding Conference April 4, 2014

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Equity Crowdfunding Italian Law Presentation Transcript

  • 1. Alessandro  M.  LERRO   FINANCING  START-­‐UPs   EQUITY  CROWDFUNDING   Roma,  November  15,  2013   LUISS  –  Scuola  di  Management  –  MBA  ALUMNI   EQUITY CROWDFUNDING ITALIAN LAW Avv.  Alessandro  M.  Lerro   April  4,  2014   Palo  Alto  
  • 2. LAW:   LAW  n.  221,  Dec.  17,  2012   “2.0  Growth  Decree”     REGULATION:   CONSOB  Reg.  n.  18592   June  26,  2013   ©2013 A.M. Lerro  
  • 3. LEGAL  FRAMEWORK:   CONSOB  has  the  supervision  and  is   enWtled  to    impose  penalWes   PlaYorms  ought  to  be  registered  with   CONSOB   PlaYoms  ought  to  meet  reputaWon  and   competence  requirements   Investment  is  subject  to  MIFID  and   operated  through  BROKER-­‐DEALERS   ©2013 A.M. Lerro  
  • 4. TARGET  CO.:     ONLY   INNOVATIVE  START  UPs   ARE  ALLOWED   TO  RAISE  EQUITY     FROM  THE  CROWD   (…for  now)   ©2013 A.M. Lerro  
  • 5. You  can  raise   €  5.000.000,00   per  company,  per  year   ©2013 A.M. Lerro  
  • 6. CROWDFUNDING  PLATFORMS:     ONLINE  PLATFORMS,     WHOSE  EXCLUSIVE  PURPOSE     IS  TO  HELP     COMPANIES   TO  RAISE  EQUITY     FROM  THE  CROWD  (art.1.5.9  TUF)     ©2013 A.M. Lerro  
  • 7. SMALL  INVESTMENTS   • Directly  managed   • MIFID  exempted   BIG  INVESTMENTS   • Partner  with  a  BROKER-­‐DEALER   • Investment  profile  to  match  with   proclivity  to  risk  investment   ©2013 A.M. Lerro  
  • 8.                                       SMALL  INVESTMENTS:     INDIVIDUAL:   <  500€  per  investment   <  1000€  per  year       COMPANY:   <  5.000€  per  investment   <  10.000€  per  year     ©2013 A.M. Lerro  
  • 9. BROKER-­‐DEALERS:     BANKS  and  INVESTMENT  Co.s   Take  in  charge  the  PAYMENT,   the  execuWon  of  the  investment   ©2013 A.M. Lerro   MANAGE  A   CROWDFUNDING   PLATFORM   THEMSELEVES   PARTNER  WITH  A   CROWDFUNDING   PLATFORM  
  • 10. MIFID  =  European  Union  DirecWve,  Markets  in   Financial  Instruments  and  investment  services   IDENTIFICATION  OF   THE  CLIENT   ANTI-­‐LAUNDERING   RULES   INVESTMENT   PROFILE  TO  MATCH   WITH  PROCLIVITY   TO  RISK   INVESTMENTS   MIFID  PROCEDURE:       ©2013 A.M. Lerro  
  • 11. ©2013 A.M. Lerro                                         ADVISING:     Broker-­‐Dealers  may  advise   and  give  suggesWons,  within   their  general  rules.   PlaYorms  may  not  provide   recommendaWons  suitable   to  influence  pledges.       J BROKER-­‐DEALERS   L PLATFORMS  
  • 12. INVESTORS:     ITALIAN  LAW  PROVIDES     A  ROBUST  LEGAL  FRAMEWORK   OFFERING  PROTECTION   TO  INVESTORS       ©2013 A.M. Lerro  
  • 13.          There  is                NO  PERSONAL    INVESTMENT    LIMIT   MIFID  regulates  any  NON  SMALL  investment   ©2013 A.M. Lerro  
  • 14.                                       INVESTORS  EDUCATION:     Companies  must  invest  on   educaWon  and  offer  it  to   potenWal  investors.   It  helps  with  the  asymmetric   informaWon  problem.   ©2013 A.M. Lerro  
  • 15. INVESTORS  confirm   • that  they  understood  the   risks  of  equity  investment   INVESTORS  confirm   • that  their  personal  estate   will  be  not  compromised   SELF   ATTESTATION   It  is  NOT  an  Entrepreneur’s  onus;  NO  parWcular   formality  required;  NO  third  parWes  databases   ©2013 A.M. Lerro  
  • 16. SET  OF  WITHDRAWAL  RIGHTS:       WHO   WHEN   WHY   RULE   Retail  Investors   Bank  FoundaWons   Registered  Incubators   7  days  from  the   investment   No  reason  or  explanaWon:   they  just  changed  their   mind   §13.5  Reg.   Consumers*   14  days  from  the   investment   No  reason  or  explanaWon:   they  just  changed  their   mind     Consumer   Code   Retail  Investors   Bank  FoundaWons   Registered  Incubators     7  days  from  the   news,  but  before   the  campaign   closed     Material  mistake  or   something  new  happened,   suitable  to  influence  the   investment  decision     §25.2  Reg.     *  The  only  case  where  plaYorm  are  allowed  to  withold  costs   ©2013 A.M. Lerro  
  • 17. Any  Shareholders  Agreement   must  be  noWfied  to  Investors   If  the  Founding  Shareholders   sell  the  business  or  anyhow   wave  control   INFORMATION   RIGHT   TAG  ALONG  or   WITHDRAWAL   RIGHT*   SHAREHOLDERS  AGREEMENTS:     *  Only  for  RETAIL  INVESTOR   As  long  as  the  Company  enjoys  InnovaWve  Start  Up  status   ©2013 A.M. Lerro  
  • 18. TAKE AWAY: - Free sale of the shares (incentives to keep them) - No investment limit per person - 5M€ max per year - Any nationality (platform, target, investors, …) - Investment concluded through Broker-Dealers - STRONG consumers’ protection - Registered Platforms - 5% equity: Professional Investors ©2013A.M.Lerro  
  • 19. ©2013 A.M. Lerro   LAWS  AND  MATERIALS:   www.CrowdfundingInItaly.com   ©2013 A.M. Lerro  
  • 20. WWW.LERRO.IT                                                ROME     Alessandro  M.  Lerro              alessandrolerro   alessandro@lerro.it       Available  on: