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.

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
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. 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 execution of the investment
©2013 A.M. Lerro
MANAGE A
CROWDFUNDING
PLATFORM
THEMSELEVES
PARTNER WITH A
CROWDFUNDING
PLATFORM

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. ©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. 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
education and offer it to
potential investors.
It helps with the asymmetric
information 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
It is NOT an Entrepreneur’s onus; NO particular
formality required; NO third parties databases
©2013 A.M. Lerro

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. 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. 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
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