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AIJA HYC - Crowdfunding & Alternative Finance

Girona, 15-18 November 2017

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EQUITY CROWDFUNDING

Marco Bellezza

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AIJA Oslo, 29 Sept – 1 Oct 2016

Introduction to

Into the Bright Blue Yonder Current Challenges in Ship and Aviation Financing

Equity CrowdFunding (" ECF ") in Italy

• In 2012 Italy was the first EU MS to set up an ad hoc regulation for ECF (Law Decree no. 179/2012 and Consob Regulation no. 18592/2013)

• In 2017 ECF recorded a +123% increase in funds raised compared to 2016 • As of June 2017, ECF raised €12.5M financing 53 different companies • As of October 2017, there are 19 ECF web portals authorized by Consob to

manage fundraising campaigns in Italian market*

*Source: 2° Italian Report on CrowdInvesting – CrowdFunding Monitoring of Politecnico Milano

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Funds raised as of June 2017 in ECF web portals (value in €M)* Total

Last 12 months Failed campaigns No-satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

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Average of collection-goals for companies in all fundraising campaigns (109) managed by ECF web portals*

Total Last 12 months Failed campaigns Not satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

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Type of companies launching fundraising campaigns on ECF web portals as of June 2017 *

Total Last 12 months Failed campaigns Not satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

Innovative Startup

Innovative SME

Investment Vehicle

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Business of companies launching fundraising campaigns on ECF web portals as of June 2017 *

Total Last 12 months Failed campaigns Not satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

Innovative Startup

Innovative PMI

Investment Vehicle

Total

Last 12 months

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Pre-money valuation of companies launching fundraising campaigns on ECF web portals as of June 2017 *

Total Last 12 months Failed campaigns Not satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

Innovative Startup

Innovative PMI

Investment Vehicle

Total

Last 12 months

< € 100k

€ 100k - € 500k

€ 500k - € 1M

€ 1M - € 5M

€ 5M - € 10M

> € 10M

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Success rate of all fundraising campaigns (109) managed by ECF web portals*

Total Last 12 months Failed campaigns Not satisfied overfunding

* Source: 2° Italian Report on CrowdInvesting

– CrowdFunding Monitoring of Politecnico Milano

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Overview on main ECF regulatory requirements

• Portal operators must be authorized and enrolled in a public register by Consob;

• Target companies cannot collect more than € 5M in a sole fundraising campaign;

• Professional investors must subscribe at least 5% of instruments offered by target companies

• Target companies shall publish on web portal any shareholders’ agreements in force and provide the portal operator with any information required by law

• Non-professional investors shall give to the portal operator evidence of their "investment education" and creditworthiness

• Non-professional investors may freely withdraw the offer within 7 days; then, they must be granted with a withdrawal right OR a tag-along right in case of change of control over the target company

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PROS & CONS of ECF for investors

Access to a wide range of investments

Participation in innovative projects

Right to withdrawal the offer (only non-professional ones)

PROS CONS

Loss of equity interests

Exit and illiquidity

"Emotional investment"

No dividends’ distribution

Fraud risk

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MARCO BELLEZZA counsel Mail mbellezza@portolano.it Mobile +39 346 8508887 Office +39 06 696661