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Discover terms, concepts, regulations, and information related to the world of green alternative finance:


In Italy, Legislative Decree no. 30 of March 10, 2023, allowed the adaptation of national regulations to the provisions of Regulation (EU) 2020/1503 regarding crowdfunding service providers.
Although the regulation is already in force, a transitional regime is in place until November 10, 2023. Under the transitional regime provided by the ECSP Regulation, crowdfunding platforms that were already operational at the effective date have one year to comply with the new regulations, being able to continue operating under national rules until November 10, 2023.
Italian regulations have been supplemented by second-level regulation with CONSOB Regulation no. 22720 of June 1, 2023, on crowdfunding services, implementing Regulation (EU) 2020/1503 on crowdfunding service providers for businesses and Articles 4-sexies.1 and 100-ter of the TUF (in force since June 12, 2023).
Before the entry into force of European regulations, equity crowdfunding was regulated by the "Regulation on the collection of capital through online portals" adopted by CONSOB Resolution no. 18592/2013, while lending crowdfunding was regulated in the "Provisions on the collection of savings by non-banking entities" adopted by Bank of Italy Resolution no. 584/2016.


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The term crowdfunding refers to the process where multiple people (the "crowd") contribute sums of money ("funding"), often of modest amounts, to finance an entrepreneurial project or various initiatives using websites ("platforms" or "portals"). Crowdfunding is an alternative finance model and can involve either peer-to-peer loans (lending crowdfunding) or securities (equity crowdfunding).
The purpose of crowdfunding is to provide individuals and businesses with access to financial resources that may not be available through traditional channels, such as banks or other financial institutions, in terms of timing, volume, costs, and alignment with goals.
Crowdfunding also represents a disintermediation phenomenon that allows some banking services to operate with legal and operational procedures different from those established for the sector, representing a potential social as well as technological innovation.
Today, crowdfunding primarily takes place through digital tools and channels, using highly advanced payment infrastructure with the same levels of security and protection as a digital bank, making it a highly technological dimension of finance.
In Italy, approximately 350 million euros are invested annually through crowdfunding, and the cumulative total has exceeded 1.2 billion euros.
In addition to this figure, which only concerns funding originating from individuals private savings (retail investors or the "crowd"), all volumes related to operations carried out by institutional investors (banks or funds) using the same financial technology tools and processes, surpassing one billion euros each year, must be added.
Data Source: 8th Crowd Investing Italy Report, Politecnico di Milano.
Essentially, investors act as lenders and provide loans to individuals or companies in need through an online crowdfunding platform. This form of crowdfunding is based on a loan agreement and involves the repayment of the loan amount along with agreed-upon interest over time. Lending crowdfunding offers an opportunity for both investors to gain a financial return and individuals or companies to access funds without resorting to traditional financial institutions.
In other words, investors become shareholders of the company to which they provide funding. This means they will participate in the potential future profits and losses of the company, in addition to having a long-term interest in the growth and success of the business. Equity crowdfunding offers companies an alternative way to raise capital, allowing them to obtain funds from a wide base of online investors without having to give up a significant portion of ownership to a single investor or venture capitalist.
Recently, both forms of alternative finance have been collectively referred to as "crowdinvesting" to further clarify the concept of investment, whether in the form of debt or risk capital, for both businesses and individuals.
Crowdfunding service providers must:
  • be officially authorized;
  • act honestly, fairly, and professionally and in the best interests of their clients;
  • conduct a minimum level of due diligence on project owners;
  • establish effective and transparent procedures for the timely, fair, and consistent handling of complaints submitted by clients;
  • comply with conflict of interest requirements, such as the prohibition of investing in offers on their platform;
  • take all reasonable measures to avoid exacerbating operational risk when outsourcing functions to third parties;
  • meet specific prudential safeguards;
  • provide national authorities with an annual confidential list of projects financed through their platforms;
  • retain documentation related to their services and operations for a period of at least five years.
The investment is not covered by the deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council. The investment is not covered by the investor compensation system established in accordance with Directive 97/9/EC of the European Parliament and of the Council.
Like any type of investment, investors may not receive any return. Not even a bond (issued by public entities or private companies) is a security with a guaranteed absolute capital return, just like investments in stocks or shares of companies.
It's essential to remember that the liquidity of a financial instrument generally depends on its ability to be readily converted into cash without a loss of value. It primarily depends on the existence of a market where the security can be traded and the characteristics of that market.
When financial instruments are not traded on organized markets, it can be difficult or impossible to liquidate them or understand their actual value: these financial instruments are more "illiquid" (it is more challenging to sell them quickly and at a price that truly reflects their value).
All investors can participate in campaigns on the platform; however, it is important to note that diversifying investments among instruments with different risk levels contributes to reducing the risk of one's portfolio.


There are many different types of financial instruments, including:
  • Stocks/Shares: represent ownership in a company. Shareholders have the right to receive a portion of the company's profits and to vote in shareholder meetings.
  • Bonds: represent a loan of money from an investor to an issuer, which can be a company, a government, or another entity. The issuer commits to repaying the loan amount, plus interest, at the maturity of the bond.
  • Mutual Funds: are a collection of investments in various securities, such as stocks, bonds, or other assets. Mutual funds are managed by a team of professionals who allocate funds to achieve maximum returns for investors.
  • SICAV and ETFs are both investment funds that invest in a portfolio of assets, such as stocks, bonds, or commodities. However, there are some fundamental differences between the two types of funds.
  • SICAVs are variable capital investment companies, while ETFs are exchange-traded funds. This means that SICAVs are structured as joint-stock companies, while ETFs are traded on stock exchanges like stocks.
  • SICAVs can be actively or passively managed. Actively managed SICAVs have a manager who seeks to beat the market, while passively managed SICAVs seek to replicate the performance of a benchmark index.
  • ETFs are generally passively managed. This makes them a more cost-effective option than actively managed SICAVs, as managers do not have to pay fees to beat the market.
  • In general, ETFs are a more cost-effective and transparent option than SICAVs. They are also more liquid, meaning they can be easily sold on the secondary market. However, SICAVs may offer more customization opportunities as they can be actively managed.
  • Derivatives: are financial instruments whose value derives from the value of another financial instrument, such as a stock, bond, or interest rate. Derivatives can be used to speculate on price movements, hedge against risk, or for other purposes.
ESG investments are a way for investors to contribute to a more sustainable future. They can also be a way to reduce investment risk, as companies that behave sustainably are more likely to thrive in the long term.
There are many different ways to invest in ESG. Investors can choose to invest in ESG mutual funds, ESG ETFs, or individual stocks of ESG companies.
Here are some benefits of ESG investments:
  • They can contribute to a more sustainable future;
  • They can reduce investment risk;
  • They can offer competitive returns.
However, it is important to carefully assess the risks and benefits of ESG investments before investing.
Some examples of ESG factors that investors may consider:
  • Environmental impact: carbon emissions, water usage, waste, etc.;
  • Social impact: human rights, gender equity, inclusion, etc.;
  • Governance: transparency, accountability, sustainability, etc.
Investors can use various sources to assess ESG companies, including:
  • Company's annual report;
  • Company's sustainability reports;
  • Third-party ESG ratings.
The balance sheet is a document summarizing the financial position of a company or another economic entity at a given moment. It consists of three main parts:
  • Balance Sheet: shows the assets, liabilities, and equity of the company;
  • Income Statement: shows the revenues, costs, and profits of the company;
  • Cash Flow Statement: shows the cash inflows and outflows of the company.
The most important factors of the balance sheet are those that allow assessing the financial health of the company. These factors include:
  • Liquidity: the company's ability to meet its short-term obligations;
  • Solvency: the company's ability to meet all its obligations, both short-term and long-term;
  • Profitability: the company's ability to generate profits;
  • Efficiency: the company's ability to use its resources efficiently.
Liquidity is important because it allows the company to meet its short-term obligations, such as paying bills and employees.
Solvency is important because it allows the company to continue operating in the long term.
Profitability is important because it allows the company to generate profits, which can be used to reinvest in the company or distribute them to shareholders.
Efficiency is important because it allows the company to use its resources efficiently, reducing costs and increasing profits.
PAC is a particular investment method that allows investing savings through installments. It is a subscription method for Mutual Funds or, in general, Collective Investment Schemes (CIS) designed for those who want to gradually invest small amounts of money consistently.
Investing in PAC mode allows diversifying the investment portfolio by providing the opportunity to make small periodic payments.
This makes it a suitable solution for those with a medium to long-term time horizon who want to invest gradually in financial markets, with a progressive and distributed exposure over time.