Start-up ecosystems. Italian startup scene (v. 2018 ita)

Start-up ecosystems. Italian
start-up scene
IED, 17 Apr 2018
Lesson 7/2018
Frieda Brioschi / Emma Tracanella
frieda.brioschi@gmail.com / emma.tracanella@gmail.com

7. Start-up in Italy & ecosystems
Course program
1. Start-ups
2. Business Model & Canvas
3. Value Proposition Design
4. Customers & Market
5. Activities & Costs
6. Legal basics
7. Start-up ecosystems + italian scene
2

7. Start-up in Italy & ecosystems3
Italy
Switzerland
USA
Great Britain
France
China
Indonesia
Netherland
Sweden
Israel
Spain
Australia
Canada
Other
0 10 20 30 40
I’d love to open my startup in…

Start-up ecosystems
4

Where should
you incorporate?
5
(according to the Compass
Global Start up ecosystem
Ranking)
https://startupgenome.com/report2017/

Start-up ecosystem
6
A start-up ecosystem is formed by people, start-ups in
their various stages and various types of organizations in
a location (physical or virtual), interacting as a system to
create new start-up companies
https://drive.google.com/ﬁle/d/0B3ImYgVnZqRQc1h5Z2dkRHRMMVE/view

Ecosystem lifecycle model
8 https://startupgenome.com/report2017/

Ecosystem lifecycle
9

Londra

Berlino

7. Start-up in Italy & ecosystems12 https://99designs.co.uk/blog/business-en-gb/berlin-vs-london-best-city-for-startup-infographic/?lang=en-gb?lang=en-gb

Start-up in Italy
16

Where are we?
17

2011
18

Start-Up Regulation
The Start-Up Regulation (established in 2012) provides a
new set of rules promoting the creation and
development of innovative start-ups with a view to
encouraging innovation and strengthening of
enterprises’ competitiveness.
It derives from the report by the task force on start-ups
established by the Minister of Economic Development
(2011).
19

What’s a start-up?
An enterprise that has been established recently.
Whose goal is to develop, produce and market certain
goods or services.
These products are the results of research, or the
company uses a high rate of innovation in its activity.
Start-ups do not pertain just to the digital world, but are
established across all sectors.
20
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

Innovative start-ups/1
To be ‘innovative’, a start-up shall develop, produce and
trade innovative goods or services having a high
technological value and such activities should represent
its exclusive or prevailing core business.
21
http://startup.registroimprese.it/

The innovative start-up has to be a private stock
company (such as a joint-stock company or a limited
liability company or a cooperative) not listed on a
regulated market or on a multilateral negotiation system.
22

It must have been established for no longer than 60
months.
23

The innovative start-up must have its ﬁscal residence in
Italy or in one of the member States of the European
Union or the European Economic Space, provided that,
in these latter cases, the startup has its operating ofﬁce
or branch in Italy.
24

Starting from its second year, the total value of its
activity shall not exceed € 5M resulting from its last
yearly approved balance sheets.
25

The innovative start-up cannot distribute proﬁts and it
must not have distributed proﬁts since its incorporation.
26

It shall not result from the merger, division or transfer of
business from a going company.
27

Innovative start-ups/8a
EITHER
The costs allocated to research and development must
be equal to or higher than 15 per cent of the higher
value between
• the company’s production costs and;
• the company’s production value;
28
https://www.ewla.org/news/16052016/regulation-innovative-start-ups-italy

Innovative start-ups/8b
OR
At least one-third of its work force shall be represented by individuals
having a Ph.D. or carrying out a Ph.D. or having a degree and having
completed a research program of three years at public or private
research entities in Italy or abroad.
OR
At least two thirds of its workforce shall be composed of individuals with
a master degree.
29

Innovative start-ups/8c
OR
The start-up shall be the owner or assignee, or have
applied for the registration with the relevant authorities,
of an industrial property right (eg a patent) related to its
core business.
OR
The start-up shall be the titleholder of the rights relating
to an original software duly registered with the special
public registry for software.
30

Note
Generally speaking, the age, nationality or residence or
domicile of the founders and investors is not relevant.
31

Registro delle Imprese -
sezione startup
A start-up will be qualiﬁed as ‘innovative’ upon its
enrollment with the special sector of the companies’
register of the place where it has its registered ofﬁce.
32

4th quarter 2018: 8391
33 http://startup.registroimprese.it

Side deﬁnition: social goals
34

Why social start-ups?
Start-ups with a focus on the social dimension generally
tend to adopt business models that may be less
attractive for investors.
Their reason of being is to answer society’s needs ﬁrst
and foremost, along with market ones.
Thus, they have lower returns on investments and fewer
chances to develop when compared to “ordinary” start-
ups.
35

Start-ups with a social goal
• same requirements that apply to ordinary start-ups
• operates in some speciﬁc domains
• its domain must have a considerable social value
36
http://bit.ly/13PFWUI

Social domains
• Welfare
• Healthcare
• Education
• Vocational training
• Protection of the environment
• Cultural heritage
• Sustainable tourism
• Undergraduate and postgraduate education
• Research
• Cultural services
• …
37

Beneﬁts for innovative
start-ups
38

Advantages/1
• No setup costs 
(unlike most companies, start-ups do not have to pay
anything for their own creation and registration)
• No stamp duties and fees paid for issuing documents
• Notary public services free of charge for under 35s
• No Chamber of Commerce annual fee
40

Advantages/1
• No setup costs 
(unlike most companies, start-ups do not have to pay
anything for their own creation and registration)
• No stamp duties and fees paid for issuing documents
• Notary public services free of charge for under 35s
• No Chamber of Commerce annual fee
41
http://www.sviluppoeconomico.gov.it/index.php/it/per-i-media/notizie/2034862-al-via-il-20-luglio-la-nuova-
modalita-di-costituzione-con-ﬁrma-digitale-di-srl-startup-innovative
Since July 2016 notary public is no more mandatory:
it’s possible to found your limited liability company online

Advantages/2
• Special financial instruments for debt management
• Extension by 12 months of the so-called “loss carry-
forward period” (rinvio a nuovo delle perdite), to better
absorb the whole initial operation running at loss
• Postponement of the recapitalization obligations to the
following financial year when needed to protect the
share capital
Ask your financial consultant!
42

Advantages/3
• Simpliﬁed procedure for bankruptcy
• Basically an exemption from bakruptcy procedures,
innovative start-ups are subject only to the so-called
“over-indebtedness procedure”.
This shorten judicial liquidation, reducing consequences
from a bankruptcy procedure on the entrepreneur
reputation.
43

Advantages/4
• Start-ups can hire personnel through ﬁx-time contracts (6 to
36 months).
• Contracts can be renewed more than once.
• After 36 months, the contract can be further renewed for just
one more time, for no longer than 12 months, i.e. the total
duration of the contract must not exceed 48 months.
After that, the employee can keep on working for the start-up
exclusively with an open-ended contract.
44

Advantages/5
Start-ups can remunerate their team members and the
providers of external services, including lawyers and
accountants, with STOCK OPTIONS and WORK FOR
EQUITY respectively.
The tax system applicable to these instruments is
advantageous and is tailored on the most common
needs of a startup.
45

Advantages/6
Tax incentives for corporate and private investments in
start-ups for the years 2013, 2014, 2015 and 2016, both
for direct investments in startups and in case of indirect
investments (by the means of other companies investing
predominantly in startups).
Tax concessions are greater if the investment concerns
startups with a social goal or those operating in the
energy sector.
46

Advantages/7
Introduction of crowdfunding.
CONSOB has published a “Regulation on the raising of
venture capital by innovative start-ups through on-line
portals”, thanks to which Italy has become the ﬁrst EU
country to have introduced a structured legislation on
equity-based crowdfunding.
47
http://www.consob.it/documents/46180/46181/reg_consob_2013_18592_in_vig_2018.pdf/37067552-9179-489a-b18c-05fc30545d7e

Advantages/8
Credit deriving from tax return: priority access is granted to
facilitations for the employment of highly qualiﬁed personnel in
innovative start-ups and certiﬁed incubators.
48
http://www.mise.gov.it/images/stories/documenti/Executive-Summary-of-Italy's-new-policy-on-start-ups.pdf

Fiscal Incentives
Fiscal incentives in 2017 for investors:
• natural person: 30% tax credit (IRPEF), up to 30% for
innovative startups with a social goal. Max
investment: 1M-1,8M€/year. Every investment must
last at least 3 years.
• company: 30% tax credit (IRES), up to 30% for
innovative startups with a social goal. Max
investment: 1.800.000 €/year. Every investment must
last at least 3 years.
49
http://www.sviluppoeconomico.gov.it/images/stories/documenti/Scheda-di-sintesi-policy-startup-
innovative-23_02_2017.pdf

Advantages/8
Fast-track, simpliﬁed and free-of-charge access for
startups to the Fondo Centrale di Garanzia, a
Government Fund that supports access to credit through
guarantees on bank loans.
50

Advantages/9
More targeted and tailored support to the process of
internationalisation of startups provided by the Italian
Trade Promotion Agency (“ICE”). Support includes
assistance in the legal, corporate and ﬁscal activities,
real estate and credit matters.
Support measures include free-of-charge participation to
international fairs and events, as well as to international
activities the aim of which is to favour the matching
between innovative start-ups and potential investors for
the phases of early stage capital and expansion capital.
51

1. 7. Start-up in Italy & ecosystems
And then?
• Found a limited company
• Send notiﬁcation of setting up
of business
• Register at an online directory
created for this purpose at
the Chambers of Commerce
52

Business structure
53

Limited companies
• joint stock companies (società per azioni),
• share partnership companies (società in accomandita per azioni)
• limited liability companies (società a responsabilità limitata)
• simpliﬁed limited liability company (società a responsabilità
limitata sempliﬁcata)
• limited liability companies with reduced share capital (società a
responsabiltà limitata a capitale ridotto)
• cooperative companies (società cooperative)
54

Statutory minumum capital
• S.p.A. and S.a.p.A.: €120,000
• S.r.l.: €10,000.
• S.s.r.l. and S.r.l.c.r.: > €1 and < €10,000.
55

S.r.l. group
• company needs to be registered with different
institutions (the tax ofﬁce, the companies registry,
INPS, INAIL)
• registration can be done using ComUnica online
• all this has to be done via notary public
56
http://www.registroimprese.it/comunica#tab=cosa&under-tab=corsi

S.r.l. obligations
• pay an annual tax on company books;
• issue a company valuation report;
• pay tax for lodging the minutes of a meeting every
time proﬁts are distributed;
• pay for a tax advisor;
• pay taxes on the registration of the transfer of shares
from one business partner to another
57

Business life cycle
58

Liquidation
• It is the process by which a company is brought to an
end, and the assets and property of the company
redistributed.
• Liquidation may either be compulsory or voluntary.
59
http://en.wikipedia.org/wiki/Liquidation

Reasons for liquidation
A liquidation or a dissolution may occur for:
• Term elapsed
• The company has reached the business purpose or the object can't be
reached
• Unable to operate
• Statutory minumum capital less than legal minimum
• Assembly resolution
• Other reasons according to the bylaws
There’s no limit to the length of a liquidation
60

Bankruptcy
It is a legal status of a company that cannot repay the
debts it owes to creditors. Often bankruptcy is imposed
by a court order, but can be voluntary too.
Bankruptcy can be a consequence of insolvency. All
assets of the debtor are liquidated under the
administration of a ofﬁcial receiver.
61
http://it.wikipedia.org/wiki/Fallimento_(ordinamento_giuridico_italiano)

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