Crowdfunding is gradually becoming established as an alternative form of financing with multiple potential. Through equity investing and debt operations, it is possible to concretely help innovative small and medium-sized enterprises to grow, right up to listing on the stock exchange. Crowdfunding also helps to finance the real economy, which more than ever needs resources and liquidity to emerge from the pandemic crisis and become competitive, opening up the market to private savings at low interest rates and with alternative return opportunities.
It is certainly possible to see crowdfunding as a form of investment that allows individuals, especially High Net Worth Individuals (but not only), to diversify their portfolio by investing in SMEs and unlisted companies with very attractive return possibilities.
The equity crowdfunding regulation adopted by Consob opens the door for retail investors to participate in an asset class, i.e. equity investments in SMEs and start-ups, traditionally reserved for institutional investors. At the same time, however, crowdfunding creates the conditions for a new model based on substantial shareholdings that can support companies in raising larger amounts of capital, thus filling a gap that currently exists between stock market listing and crowdfunding in its purely 'retail' version. There is also room for private banking in this new model.
Today, there are 47 equity crowdfunding platforms in Italy authorised by Consob. Since 2013, a total of 719 offers have been published, mostly promoted by innovative start-ups. Of these offers, over 74% have closed successfully, exceeding the target by an average of 235.7% and involving an average of 95 backers per campaign. Data from the Milan Polytechnic's crowdfunding observatory shows the emergence of an intermediate investment band made up of equity crowdfunding offers with a target of between €2 million and €8 million, certainly the most interesting segment for private banking operators.
Furthermore, private banking can play an essential role in the development and support of innovative small and medium-sized Italian companies, fostering new investment models, bringing together investors, and helping the growth process of companies.
The world of private banking is showing a keen interest in the real economy well represented by the companies listed on the Euronext Growth Milan market (the old AIM), which increased from 77 in 2016 to 138 in 2021 (+79%).
The Euronext Growth Milan market, made up of small and medium-sized Italian companies with high growth potential that are listed in the FTSE Italia Growth Index, is confirmed as a financial instrument with great potential. This is demonstrated both by the number of qualified investors (with an average investment of around €200,000), which has doubled in the last five years, and by the total amount raised in IPOs of companies, which has exceeded €3.9 billion.
It is easy to assume that Euronext Growth Milan could represent the secondary market for start-ups raising capital on equity crowdfunding platforms. In fact, this could become an exit option for investors who would thus increase the liquidity of their investment thanks to the excellent performance achieved.
The recent confirmation of the tax credit on IPO costs of up to €500,000 for Italian SMEs will also enable them to accelerate their growth through listing on the stock exchange by channelling financial resources to the real economy.