Italian Startups Growing Together
First European government to officially endorse crowd funding
FLORENCE, Italy—Entrepreneurship in Italy is taking on a communal character. Startups have had trouble securing loans, but other supports have developed, including government-regulated and endorsed crowd funding.
Small- and medium-sized enterprises (SMEs) account for 99.9 percent of assets in Italy; they employ 80 percent of the country’s workforce; they receive only 18.3 percent of business loans. By contrast, SMEs in Switzerland receive 79 percent of business loans, and SMEs in Portugal get 76.8 percent, according to an Organization for Economic Cooperation and Development (OECD) report titled “Financing SMEs and Entrepreneurs 2013.”
The United States is on the lower end of the 23 European and North American countries analyzed in the report, with 26.5 percent of its business loans going to SMEs.
In March this year Italy became the first country in Europe to start regulating and officially encouraging crowd funding.
Crowd funding works from the bottom up—Internet platforms allow entrepreneurs to finance their projects by attracting many small investors.
The Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, or Consob) supervised the drafting of the regulations. In a press release, Consob said the crowd funding can “enable the development of an initial phase of experimentation, of raising capital through online portals, with the aim of promoting the development and growth of the country.”
A few weeks later, on April 17, a crowd funding network came together for a meeting in Turin, a business and cultural center in northern Italy. The entrepreneurs had tested the pulse of cash flowing through the veins of the crowd funding network.
In Italy, there are 21 active platforms, which have funded a combined 2,500 projects since 2005. The platforms service not only startups, but also social justice projects, art projects, and more.
“I think the values and alternative methods of crow funding have to be brought into schools,” wrote Alessio Barollo, a designer and member of the network Crowdfunding Italia, in an article on the network’s website. He said educating children about crowd funding is not “to convince young people to earn money with any kind of wacky idea.”
“Instead, from a young age they can understand that … cooperation [between people] with common goals can make a difference in the future,” Barollo said.
The government has also officially recognized incubators as another hand up for entrepreneurs.
Incubators are capital companies with a mission to support and help develop innovative startups. Businesses should leave the incubation program financially independent. The Italian government supports incubators with tax benefits. NanaBianca, for example, has successfully incubated 10 startups.
Some startups are collaborating by sharing space. Bringing diverse entrepreneurs under one roof has its benefits, said Antonio Ardiccioni, founder and manager of Multiverso, a collective enterprise based in Florence.
“The economic part is definitely important: you’ll save on rent and utilities,” Ardiccioni said. “But what is decisive, are the services and values that cannot be found in a single office.”
“The basic point is to be part of the circuit,” he said. “There are over 30 professionals, including graphic designers, architects, advertising, [and] public relations, that are able to increase their ability and their professionalism by participating in shared initiatives.”
Money is not everything, said Valentina Maltagliati, a corporate communications consultant and author of “Elevator Pitch,” a book on how to present a project to investors.
“The key is to get the idea across that the project will create value, not just a profit,” Maltagliati said. “The sense of innovation is to realize something that wasn’t here before, or to improve something that existed before in order to improve our lives.”