Palo Alto Conference - Italian Equity Crowdfunding Law

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This is a quick overview about Italian Equity Crowdfunding Law. It was presented in Palo Alto, during the 2nd SV Crowdfund - Silicon Valley meets Crowdfunding conference, in April 2014.
The event is managed by Crowdfund Beat.

Published in: Business, Economy & Finance
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Palo Alto Conference - Italian Equity Crowdfunding Law

  1. 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. 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. 3. LEGAL FRAMEWORK: CONSOB has the supervision and is entitled to impose penalties Platforms ought to be registered with CONSOB Platfoms ought to meet reputation and competence requirements Investment is subject to MIFID and operated through BROKER-DEALERS ©2013 A.M. Lerro
  4. 4. TARGET CO.: ONLY INNOVATIVE START UPs ARE ALLOWED TO RAISE EQUITY FROM THE CROWD (…for now) ©2013 A.M. Lerro
  5. 5. You can raise € 5.000.000,00 per company, per year ©2013 A.M. Lerro
  6. 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. 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. 8. SMALL INVESTMENTS: INDIVIDUAL: < 500€ per investment < 1000€ per year COMPANY: < 5.000€ per investment < 10.000€ per year ©2013 A.M. Lerro
  9. 9. BROKER-DEALERS: BANKS and INVESTMENT Co.s Take in charge the PAYMENT, the execution of the investment ©2013 A.M. Lerro MANAGE A CROWDFUNDING PLATFORM THEMSELEVES PARTNER WITH A CROWDFUNDING PLATFORM
  10. 10. MIFID = European Union Directive, 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. 11. ©2013 A.M. Lerro ADVISING: Broker-Dealers may advise and give suggestions, within their general rules. Platforms may not provide recommendations suitable to influence pledges.  BROKER-DEALERS  PLATFORMS
  12. 12. INVESTORS: ITALIAN LAW PROVIDES A ROBUST LEGAL FRAMEWORK OFFERING PROTECTION TO INVESTORS ©2013 A.M. Lerro
  13. 13. There is NO PERSONAL INVESTMENT LIMIT MIFID regulates any NON SMALL investment ©2013 A.M. Lerro
  14. 14. INVESTORS EDUCATION: Companies must invest on education and offer it to potential investors. It helps with the asymmetric information problem. ©2013 A.M. Lerro
  15. 15. INVESTORS confirm • that they understood the risks of equity investment INVESTORS confirm • that their personal estate will be not compromised It is NOT an Entrepreneur’s onus; NO particular formality required; NO third parties databases ©2013 A.M. Lerro
  16. 16. SET OF WITHDRAWAL RIGHTS: WHO WHEN WHY RULE Retail Investors Bank Foundations Registered Incubators 7 days from the investment No reason or explanation: they just changed their mind §13.5 Reg. Consumers* 14 days from the investment No reason or explanation: they just changed their mind Consumer Code Retail Investors Bank Foundations 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 platform are allowed to withold costs ©2013 A.M. Lerro
  17. 17. Any Shareholders Agreement must be notified 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 Innovative Start Up status ©2013 A.M. Lerro
  18. 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. 19. ©2013 A.M. Lerro LAWS AND MATERIALS: www.CrowdfundingInItaly.com ©2013 A.M. Lerro
  20. 20. WWW.LERRO.IT ROME Alessandro M. Lerro alessandrolerro alessandro@lerro.it Available on:

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