Those following SeedInvest and other crowdfunding platforms will have witnessed great progress in the world of crowdfunding, not only in the form of the historic JOBS Act but also the amount of outreach that has been done to get more and more people on board. Given the widespread discourse on crowdfunding within the United States, a logical next step may be to wonder about its application on an international scale.
There is much to suggest that crowdfunding is garnering global significance. Last week, within the same weekend of meeting with SeedInvest’s advisor Jason Best, the Italian government passed a law that will legalize equity crowdfunding. Designated as part of the “Decreto Crescita” (“Growth Decree”) which aims to “digitize public administration,” crowdfunding is listed as one of the several means by which budding entrepreneurs and firms can amass capital under the section Raccolta diffusa di capitali di rischio tramite portali online (translated as “Widespread collection of venture capital through online portals”).
At the moment, the law focuses on high-tech firms whose purpose is the “development and commercialization of high-tech value products or services,” among other requirements dictating its yearly output (which should not exceed five million Euros from the second year), duration of operation (no more than 48 months) and prevention of profit distribution. Firms with less than 51% of natural persons are also not eligible. The CONSOB (Commissione Nazionale per la Società e La Borsa), Italy’s SEC counterpart, is currently reviewing the bill in a sixty-day reviewing period and will be establishing measures to protect professional and non-professional investors.
According to Daniela Castrataro, co-founder of twintangibles, this bodes well for small, local businesses in the future despite the technological focus. Though the topic of crowdfunding has gained ground very rapidly, greater efforts are being made to raise awareness of crowdfunding among the Italian public, including the crowdfunding conference Crowdfuture to be held in Rome later this month that is being organized in part by Castrataro.
The big step taken in Italy should not be taken as the only cue for optimism in the global reach of crowdfunding. Jason was also recently in Colombia and Mexico in talks with officials looking to further their prospects in crowdfunding, which reflects just how vast the crowd in crowdfunding can be.
This post was written by SeedInvest on September 6, 2016
Equity Crowdfunding Goes Global