Italy Law announced for Equity Crowdfunding today

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Italy now legally leads the global crowdfunding pack with the implementation of the first equity crowdfunding law in the world. The Soho Loft comments on these legal provisions in effect today.

Italy Crowdfunding Conference by The Soho Loft in January 2013

“This is a powerful announcement to the nations and regulators of the world that this law liberates capital formation,” Drake says.

Crowdfunding has been changing the financial landscape of Italy ever since the Italian Parliament voted for the implementation of a crowdfunding law on December 17, 2012. The legislature then tasked the Commissione Nazionale per le Società e la Borsa (CONSOB), the equivalent of the Securities and Exchange Commission in the U.S., to issue the regulatory provisions necessary for the implementation of the bill – the “Decreto Crescita Bis” or the Italian “Growth Act 2.0” bill.

And now, finally, the law has been signed by the five CONSOB commissioners (equivalent to our five SEC commissioners), and will be published tomorrow. You will be able to crowdfund for equity right after publication of the law. This makes Italy the first country in the world to implement new laws that support crowdfunding for equity.

David Drake, founder and chairman of The Soho Loft, says, "The equity law is a huge accolade for equity crowdfunding globally.”

Although it won't accelerate the lethargic implementation of crowdfunding under the JOBS Act, Drake says, it does announce to the world that nations are acknowledging this unstoppable disruptive finance mechanism. Equity crowdfunding was responsible for only 5% of overall crowdfunding revenues globally last year but with this law the number could potentially double or triple by 2014.

“This is a powerful announcement to the nations and regulators of the world that this law liberates capital formation,” Drake says. “Viva Italia for the world's first national-created crowdfunding equity law, and bravo Italia for this legislative change that will create jobs and stir innovation for financial leadership.."

The bill focuses on innovation as a factor of sustainable growth, and as a way to enhance the competitiveness of enterprises in Italy. The provisions introduce, for the first time, legislative frameworks that encourage the creation and growth of innovative startups.

The law says that for general solicitation:

1.An offering must receive 5% investment by a professional investor, a registered incubator or a bank foundation.
2. The maximum raised cannot exceed €5 million per year.
3. Individual investments must be concluded by broker-dealers to comply with anti-laundering laws and the E.U. Markets in Financial Instruments Directive (MiFID). This dictates that your investment profile match your proclivity to risk investments. But there will be an exemption for small investments.

There are positive changes to the law that we just learned:

1. Professional investors must own 5% of a crowdfunded firm after the crowdfunding and not before, as previously dictated.
2. There will be MIFID exemptions for investments lower than €500 for individuals and €1000 for companies, thus lowering cost and red tape. Nevertheless, payment must be managed through a broker dealer.
3. Under Italian law as well as for Europe in general, professional or "accredited" investors are defined by the E.U. MiFID, Schedule 2, as individuals or organizations that possess the experience, knowledge and expertise to make investment decisions and properly assess risks.

“Italy now is the best country for international crowdfunding, especially for larger projects,” says Alessandro Maria Lerro, Senior Partner at Lerro & Partners, who is a crowdfunding expert in Italy.

The investment cap is €5 million (more than six times that of the JOBS Act) and there is no personal investment limit for individuals, and any European company domiciled in Italy is eligible to crowdfund, regardless of the nationality of its shareholders.

For now, equity crowdfunding is limited to innovative start-ups, filed in a special registry, Lerro notes. Companies must meet some prerequisites, and be focused on the production, development or trading of innovative products or services with high technological value. But the government is wondering whether to enlarge the scope of the law to include any commercial company.

“Italy has made history as the first country to implement an equity-based crowdfunding law, moving more quickly than the lethargic U.S. equity crowdfunding law, the Jumpstart Our Business Startups Act (JOBS Act),” Drake said. "Our global investor communities have been calling us daily since we broke the news, as they seek collaboration and learning how to implement national laws. This is very exciting as global businesses cover all the continents today."

The Soho Loft has been monitoring crowdfunding developments in Italy. We are working closely with leading platforms and broker-dealers in Italy, as well as with several Italian banks that are looking for strategic partners. Stay in touch with us to be part of this latest step forward for equity crowdfunding.

About The Soho Loft (

The Soho Loft is an event-driven financial media company that advances innovative investing and entrepreneurship through visionary leadership, relevant education and strategic collaboration. Major areas of focus and expertise include, but are not limited to, online investment automation, capital formation, fund structures, angel network creation, private and public partnerships, venture capital, crowdfunding, private equity and hedge funds. It is a subsidiary of LDJ Capital based in New York, whose founder and chairman, David Drake, is also co-founder and former executive board member of the Crowdfund Intermediary Regulatory Advocates (CFIRA) and Crowdfunding Professional Association (CFPA). He is a strong advocate of financial innovation, the US JOBS Act (Jumpstart Our Business Startups Act), Dodd-Frank Act, and other entrepreneurial, economic and investment policies through his work as an international speaker and writer.

For press inquiries, please contact carmen.campo(at)

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Carmen Campo
since: 06/2012
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