Italy: Embracing Crowdfunding
No, it’s not a lip-smacking pasta dish. It’s what Italians say when you purchase your first Lamborghini or probably your new Ferrari. It’s also what they said when they conveyed their plaudits about The Soho Loft’s successful two-day Crowdfunding Event in Oasi Dei Celti, Lake Como, Italy held January 24 and 25, 2013.
Entrepreneurs, investors, sponsors, researchers, leaders and students found common ground in this Crowdfunding Event where innovation, sustainable growth and societal well-being were at the forefront of the event’s discussions and workshops.
Aljona Sandgren, one of the speakers with diverse experience in social, green and academic entrepreneurship, said, “To have innovative ideas is not enough, one needs to bring innovations to society. Entrepreneurs are the necessary link in bringing new ideas to the market and society.”
Sandgren, who is from Sweden, pointed out in her Green Enterprising and Innovation presentation that entrepreneurship is not a cure-all and yet it definitely plays a big part in resolving economic issues. Nonetheless she maintains, it is not enough to be entrepreneurial. The participants were encouraged to take out their big Green crayon and promote a conscious effort to put social and environmental sustainability into the picture.
Very few people know that Lake Como’s beautiful tree-lined mountain peaks and shores fringed with old elegant villas, tiered gardens and olive groves were the inspiration behind the creation of the planet of Naboo. Think Star Wars Episode 1. Lake Como’s scenic beauty and uniqueness has been recognised as early as the Roman Times and has continued to be valued right into our glitzy modern age (some Hollywood stars have made it their home). Lake Como is a classic reminder of the importance of preserving the beauty of nature. Jin Lee, a participant and researcher from China, revealed that Como Lake is shaped like the Chinese character for man. This resemblance is an uncanny reminder of the connection between man and nature and the necessity to live in harmony with the environment.
Financing is a significant issue in stimulating innovation, especially financing on the initial stages of business. How to motivate entrepreneurs by taking into account the relevance of social, cultural and economic conditions in differing contexts is also one of the major issues that was discussed in this Crowdfunding event.
Fresh from his speaking engagement in the European Business Angels Network event in Istanbul, Turkey, David Drake, keynote speaker of the Como Event, stressed the importance of taking into account the differences of cultural contexts in entrepreneurship and Crowdfunding. Vince Rosano, organizer of the event, and a serial entrepreneur himself, emphasized the importance of passion as the main motivator behind entrepreneurial and innovative activities. Drake confirmed that one has to appeal to the people’s hearts when talking about Crowdfunding.
Drake, founder of The Soho Loft, believes in paving a path to economic sustainability and financial innovation. “Crowdfunding is an alternative form of financial support of innovation that has emerged recently in the USA and some parts of Europe,” Drake said. “In a short period of time, Crowdfunding has helped transformed many people’s dreams into reality. Crowdfunding is a great financial tool in supporting entrepreneurs and innovators as it allows everyone in society, regardless of how much money they possess, to choose to support innovations which appeal to their values and ideas,” Drake added.
The common challenge among innovators and entrepreneurs in many countries is the lack of financing support. Crowdfunding as an alternative source of financing innovation, particularly during the early stages of business development, was covered in the main loop of the event’s discussions.
Drake’s Den of training workshops helped innovators and entrepreneurs understand issues pertaining to Marketing and Social Media, Reward Strategy, Branding and Positioning, Presentation Skills, and Strategic partnership among other things. Drake underscored the importance of understanding the mechanisms and ideas behind ‘due diligence’ and other issues like production capacity, risk assessment, reputation management and transparency. Prof. Andrea Albanese, who specializes in Web Business Intelligence, also discussed the importance of social networking in business. Several Crowdfunding events are in the offing as Alessandro Mazini from Rome suggested in relation to developing a pilot project that links university researchers and the business world to Crowdfunding ideas.
The first Crowdfunding convention, Crowdfuture, held in Rome last October, has helped boost Crowdfunding awareness in Italy. The convention has given dynamism to the growing Crowdfunding sector in the country as well as in other parts of Europe.
David Drake has contributed much in the growth of Crowdfunding ventures in Europe after his work in support of the passing of the JOBS Act in the US in April last year. Drake says, “the European Commission initiating the official Transatlantic Economic Council Forum in Rome has discussed ways of capital creation and capital infusion to businesses in Europe. There is a growing relevance of Crowdfunding platforms and a great need to stress key wisdom in entrepreneurship around the world through Crowdfunding.”
Another important discussion that took center stage at the event was Decreto Crescita. Decreto Crescita, the Italian counterpart of America’s JOBS Act, has also helped fuel many Crowdfunding ventures in Italy to move forward. Decreto Crescita, which translates to “Growth Decree”, is very similar to the JOBS Act. Its driving force like America’s JOBS Act is to boost growth by getting more businesses funded in order to create more jobs. Americans can readily understand Italy’s Decreto Crescita, which includes the new equity Crowdfunding provisions. The United States’ JOBS Act has many of the same challenges and goals as Italy’s Decreto Crescita.
In the meantime, equity Crowdfunding will await final legislation from Italy’s version of the SEC, CONSOB. Its main priority will be to protect non-accredited investors, which is also happening in the US within the SEC.
However, Italy’s Crowdfunding limits its platforms to startups, not established businesses. Companies should not be in operation for more than four years. There are also other restrictions involved affecting the distribution of profits. Investors will not be getting quarterly dividends. The companies being funded also have to be at least 51% “natural persons”, not just legal entities. Lastly, Italian Crowdfunding also requires one “professional investor” or venture capitalist to secure the offering, and yearly output for Crowdfunding businesses has a ceiling of 5 million euros.
In spite of certain restrictions on Italian Crowdfunding, and the challenges it still has to solve in the Italian government agencies, the Decreto Crescita takes a leap forward to legitimize Crowdfunding and transport it into a more extensive use. It’s one thing to have innovative ideas but it’s another thing to transform these ideas into businesses that will reach more people in society.
The Como Crowdfunding Event was capped by a cultural event and a visit to the quaint town of Lake Como. Of course, the participants were treated to a sumptuous spread of mouth-watering Italian dishes.
Now, that calls for another Congratulazioni!