Presentation given by Alessandro M. Lerro, Lerro & Partners, Italy @SVCrowdfunding Conference April 4, 2014

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
enWtled
to
impose
penalWes
PlaYorms
ought
to
be
registered
with
CONSOB
PlaYoms
ought
to
meet
reputaWon
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
execuWon
of
the
investment
©2013 A.M. Lerro
MANAGE
A
CROWDFUNDING
PLATFORM
THEMSELEVES
PARTNER
WITH
A
CROWDFUNDING
PLATFORM

10. MIFID
=
European
Union
DirecWve,
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
suggesWons,
within
their
general
rules.
PlaYorms
may
not
provide
recommendaWons
suitable
to
influence
pledges.
J
BROKER-­‐DEALERS
L
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
educaWon
and
offer
it
to
potenWal
investors.
It
helps
with
the
asymmetric
informaWon
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
SELF
ATTESTATION
It
is
NOT
an
Entrepreneur’s
onus;
NO
parWcular
formality
required;
NO
third
parWes
databases
©2013 A.M. Lerro

16. SET
OF
WITHDRAWAL
RIGHTS:
WHO
WHEN
WHY
RULE
Retail
Investors
Bank
FoundaWons
Registered
Incubators
7
days
from
the
investment
No
reason
or
explanaWon:
they
just
changed
their
mind
§13.5
Reg.
Consumers*
14
days
from
the
investment
No
reason
or
explanaWon:
they
just
changed
their
mind
Consumer
Code
Retail
Investors
Bank
FoundaWons
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
plaYorm
are
allowed
to
withold
costs
©2013 A.M. Lerro

17. Any
Shareholders
Agreement
must
be
noWfied
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
InnovaWve
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
Available
on: