The equity crowdfunding is an accelerating trend.
Funding sources in 2017: equity crowdfunding
For those not familiar with the term, it refers to the method of financing that enables unlisted companies to raise funds from the public in exchange for company shares.
According to the definition adopted by Consob (National Commission for Society and Stock Exchange):
“We talk about equity-based crowdfunding when using the on-line investment, we buy a real way of participation in a company, in which case, the “reward” for funding is the manifold economic and administrative rights that derive from the interest in the company”
After an uninterrupted period of growth and of a great interest from the public and the press, in Italy, the year 2016 was, in some ways, the year of disillusionment.
But in the next two years, thanks to the measures put in place by regulation authorities, we’re ready to resume the race.
From the birth of the first crowdfunding platform to date, €96 million have been collected in Italy alone.
That is, the formula reserved for startups and innovative SMEs.
Nevertheless, for those startups which managed to successfully conclude their campaigns, the average of the funds raised was 243.000 euros per campaign.
In 2017, the growth of equity crowdfunding is expected to be caused by these two fundamental areas:
- Normative. The law of stability was approved just before Renzi’s resignation from the government. It offers SMEs an opportunity to use equity crowdfunding as a form of financing.
- New initiatives of young Italian minds. Despite the adverse economic and social conditions, Italian entrepreneurs rolled up their sleeves and started high-impact projects. Projects which have not gone unnoticed before the eyes of the press or national and international investors.
This next biennium in collective financing is going to be promising because equity crowdfunding has all the necessary conditions to reach its full potential.
It is likely to stimulate the growth of the Italian startup ecosystem, so we will be able to see more companies with the label “Made in Italy”.
What do you think about equity crowdfunding? Have you tried raising money through crowdfunding? Let me know what you think by leaving a comment below.