start-ups in italy and ecosystems around the world (v. 2017-2018 eng)

Start-up in Italy & ecosystems around the world

IED, 28 Nov 2017 Lesson 7/2017-18

Frieda Brioschi / Emma Tracanella [email protected] / [email protected]

mailto:[email protected]

mailto:[email protected]

7. Start-up in Italy & ecosystems

Course program1. Start-ups

2. Business Model & Canvas

3. Value Proposition Design

4. Customers & Market

5. Activities & Costs

6. Legal basics


2


Groups

3


Start-up in Italy

4

7. Start-up in Italy & ecosystems5


The law

6


Decreto Crescita bis

On 4th October 2012, the Italian Government approved a Law Decree on “Further urgent measures for Italy’s economic growth”.

Section IX of the Law Decree (articles 25 to 32) provides specific measures which are aimed at promoting the creation and development of startups.

This is the first time the Italian legislation deals with such companies.

7

http://bit.ly/XAK87g


Decreto Crescita bis

After being approved by the Italian Government, the Law Decree was signed by the President of the Republic and published in the Official Journal (Decree Law no. 179, 18th October 2012).

8

http://bit.ly/XAK87g


Start-Up Regulation

On December 17, 2012, the Law Decree no. 179 was modified by the Parliament and subsequently converted into law (the Start-Up Regulation).

9

http://www.lw.com/thoughtLeadership/boosting-innovative-start-ups-italy


Modifications

Subsequently the Law was modified by the Law Decret n. 76/2013 issued on 28 June 2013 and by the Law Decret 3/2015, converted into law n. 33/2015 on 23 march 2015.

10

http://www.fe.camcom.it/attivitaistituzionali/registro-imprese/start-up/start-up

http://www.fe.camcom.it/attivitaistituzionali/registro-imprese/start-up/start-up


Start-Up Regulation

The Start-Up Regulation provides a new set of rules promoting the creation and development of innovative start-ups with a view to encouraging innovation and strengthening of enterprises’ competitiveness.

It derives from the report by the task force on start-ups established by the Minister of Economic Development.

11


Why start-up in ItalyOver time, Italy has demonstrated that it is able to develop by exploiting some of its great strengths:

• clothing and fashion,

• furniture,

• automation technology and mechanics,

• food and wine industry.

It has created and developed companies that can sell their best products around the world. In many cases they have even become global leaders.

12

http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf


Looking overseas

In the last 10 years, start-ups have generated 3 million jobs in the United States.

President Obama launched Startup America which "moved" the equivalent of 1 billion dollars in business services.

Why are they doing this? Because they are aware of the fact that, nowadays, 40% of the wealth in the US is produced by enterprises that did not even exist 30 years ago.

13



What’s a start-up?

An enterprise that has been established recently.

Whose goal is to develop, produce and market certain goods or services.

These products are the results of research, or the company uses a high rate of innovation in its activity.

Start-ups do not pertain just to the digital world, but are established across all sectors.

14



Innovative start-ups/1

To be ‘innovative’, a start-up shall develop, produce and trade innovative goods or services having a high technological value and such activities should represent its exclusive or prevailing core business.

15

http://startup.registroimprese.it/



The innovative start-up has to be a private stock company (such as a joint-stock company or a limited liability company or a cooperative) not listed on a regulated market or on a multilateral negotiation system.

16




It must have been established for no longer than 60 months.

17




The innovative start-up must have its fiscal residence in Italy or in one of the member States of the European Union or the European Economic Space, provided that, in these latter cases, the startup has its operating office or branch in Italy.

18




Starting from its second year, the total value of its activity shall not exceed € 5M resulting from its last yearly approved balance sheets.

19




The innovative start-up cannot distribute profits and it must not have distributed profits since its incorporation.

20




It shall not result from the merger, division or transfer of business from a going company.

21



Innovative start-ups/8a

EITHER

The costs allocated to research and development must be equal to or higher than 15 per cent of the higher value between

• the company’s production costs and;

• the company’s production value;

22

https://www.ewla.org/news/16052016/regulation-innovative-start-ups-italy



Innovative start-ups/8b

OR

At least one-third of its work force shall be represented by individuals having a Ph.D. or carrying out a Ph.D. or having a degree and having completed a research program of three years at public or private research entities in Italy or abroad.

OR

At least two thirds of its workforce shall be composed of individuals with a master degree.

23




Innovative start-ups/8cOR

The start-up shall be the owner or assignee, or have applied for the registration with the relevant authorities, of an industrial property right (eg a patent) related to its core business.

OR

The start-up shall be the titleholder of the rights relating to an original software duly registered with the special public registry for software.

24




Note

Generally speaking, the age, nationality or residence or domicile of the founders and investors is not relevant.

25




Registro delle Imprese - sezione startup

A start-up will be qualified as ‘innovative’ upon its enrollment with the special sector of the companies’ register of the place where it has its registered office.

26




July-September 2017

27

http://startup.registroimprese.it/isin/static/startup/index.html?slideJump=32


Side definition: social goals

28


Why social start-ups?

Start-ups with a focus on the social dimension generally tend to adopt business models that may be less attractive for investors.

Their reason of being is to answer society’s needs first and foremost, along with market ones.

Thus, they have lower returns on investments and fewer chances to develop when compared to “ordinary” start-ups.

29



Start-ups with a social goal

• same requirements that apply to ordinary start-ups

• operates in some specific domains

• its domain must have a considerable social value

Examples of domains are social inclusion, fight to marginalization of disabled persons, environmental protection etc.

30

http://bit.ly/13PFWUI


Social area• Welfare

• Healthcare

• Education

• Vocational training

• Protection of the environment

• Cultural heritage

• Sustainable tourism

• Undergraduate and postgraduate education

• Research

• Cultural services

• …

31



Benefits for innovative start-ups

32


Advantages/1

• No setup costs(unlike most companies, start-ups do not have to pay anything for their own creation and registration)

• No stamp duties and fees paid for issuing documents

• Notary public services free of charge for under 35s

• No Chamber of Commerce annual fee

33



Advantages/1

• No setup costs(unlike most companies, start-ups do not have to pay anything for their own creation and registration)

• No stamp duties and fees paid for issuing documents

• Notary public services free of charge for under 35s

• No Chamber of Commerce annual fee

34

http://www.sviluppoeconomico.gov.it/index.php/it/per-i-media/notizie/2034862-al-via-il-20-luglio-la-nuova-modalita-di-costituzione-con-firma-digitale-di-srl-startup-innovative

Since July 2016 notary public is no more mandatory:

it’s possible to found your limited liability

company online




Advantages/2• Special financial instruments for debt management

• Extension by 12 months of the so-called “loss carry-forward period” (rinvio a nuovo delle perdite), to better absorb the whole initial operation running at loss

• Postponement of the recapitalization obligations to the following financial year when needed to protect the share capital

Ask your financial consultant!

35


Advantages/3

• Simplified procedure for bankruptcy

• Basically an exemption from bakruptcy procedures, innovative start-ups are subject only to the so-called “over-indebtedness procedure”.

This shorten judicial liquidation, reducing consequences from a bankruptcy procedure on the entrepreneur reputation.

36



Advantages/4• Start-ups can hire personnel through fix-time contracts (6 to

36 months).

• Contracts can be renewed more than once.

• After 36 months, the contract can be further renewed for just one more time, for no longer than 12 months, i.e. the total duration of the contract must not exceed 48 months.

After that, the employee can keep on working for the start-up exclusively with an open-ended contract.

37



Advantages/5

Start-ups can remunerate their team members and the providers of external services, including lawyers and accountants, with STOCK OPTIONS and WORK FOR EQUITY respectively.

The tax system applicable to these instruments is advantageous and is tailored on the most common needs of a startup.

38



Advantages/6

Tax incentives for corporate and private investments in start-ups for the years 2013, 2014, 2015 and 2016, both for direct investments in startups and in case of indirect investments (by the means of other companies investing predominantly in startups).

Tax concessions are greater if the investment concerns startups with a social goal or those operating in the energy sector.

39



Advantages/7

Introduction of crowdfunding.

CONSOB has published a “Regulation on the raising of venture capital by innovative start-ups through on-line portals”, thanks to which Italy has become the first EU country to have introduced a structured legislation on equity-based crowdfunding.

(still underway: there’s a missing law)

40



Advantages/8

Credit deriving from tax return: priority access is granted to facilitations for the employment of highly qualified personnel in innovative start-ups and certified incubators.

41

http://www.mise.gov.it/images/stories/documenti/Executive-Summary-of-Italy's-new-policy-on-start-ups.pdf

http://www.mise.gov.it/images/stories/documenti/Executive-Summary-of-Italy's-new-policy-on-start-ups.pdf


Fiscal Incentives

Fiscal incentives in 2013-2016 time frame for investors: • natural person: 19% tax credit (IRPEF), up to 25% for

innovative startups with a social goal. Max investment: 500.000 €/year. Every investment must last at least 2 years.

• company: 20% tax credit (IRES), up to 27% for innovative startups with a social goal. Max investment: 1.800.000 €/year. Every investment must last at least 2 years.

42

http://www.gazzettaufficiale.it/eli/id/2014/03/20/14A02246/sg


Advantages/8

Fast-track, simplified and free-of-charge access for startups to the Fondo Centrale di Garanzia, a Government Fund that supports access to credit through guarantees on bank loans.

43



Advantages/9

More targeted and tailored support to the process of internationalisation of startups provided by the Italian Trade Promotion Agency (“ICE”). Support includes assistance in the legal, corporate and fiscal activities, real estate and credit matters.

Support measures include free-of-charge participation to international fairs and events, as well as to international activities the aim of which is to favour the matching between innovative start-ups and potential investors for the phases of early stage capital and expansion capital.

44


1. 7. Start-up in Italy & ecosystems

And then?

• Found a limited company

• Send notification of setting up of business

• Register at an online directory created for this purpose at the Chambers of Commerce

45


Limited companies• joint stock companies (società per azioni),

• share partnership companies (società in accomandita per azioni)

• limited liability companies (società a responsabilità limitata)

• simplified limited liability company (società a responsabilità limitata semplificata)

• limited liability companies with reduced share capital (società a responsabiltà limitata a capitale ridotto)

• cooperative companies (società cooperative)

46


Statutory minumum capital

• S.p.A. and S.a.p.A.: €120,000

• S.r.l.: €10,000.

• S.s.r.l. and S.r.l.c.r.: > €1 and < €10,000.

47


S.r.l. group

• company needs to be registered with different institutions (the tax office, the companies registry, INPS, INAIL)

• registration can be done using ComUnica online

• all this has to be done via notary public

48

http://www.registroimprese.it/comunica#tab=cosa&under-tab=corsi


S.r.l. obligations

• pay an annual tax on company books;

• issue a company valuation report;

• pay tax for lodging the minutes of a meeting every time profits are distributed;

• pay for a tax advisor;

• pay taxes on the registration of the transfer of shares from one business partner to another

49


Liquidation

• It is the process by which a company is brought to an end, and the assets and property of the company redistributed.

• Liquidation may either be compulsory or voluntary.

50

http://en.wikipedia.org/wiki/Liquidation


Reasons for liquidationA liquidation or a dissolution may occur for:

• Term elapsed

• The company has reached the business purpose or the object can't be reached

• Unable to operate

• Statutory minumum capital less than legal minimum

• Assembly resolution

• Other reasons according to the bylaws

There’s no limit to the length of a liquidation

51


Bankruptcy

It is a legal status of a company that cannot repay the debts it owes to creditors. Often bankruptcy is imposed by a court order, but can be voluntary too.

Bankruptcy can be a consequence of insolvency. All assets of the debtor are liquidated under the administration of a official receiver.

52

http://it.wikipedia.org/wiki/Fallimento_(ordinamento_giuridico_italiano)


Labour agreements

53


Jobs Act labour law

• Apprenticeship

• Freelance (VAT number)

• Freelance (Fixed regime)

• Occasional work

• Fixed term agreement

54


Apprenticeship agreement

• Job & training

• age: 18-29

• Total employee cost low

55


FreelanceOften in Italy freelances are used as regular employees.

After Jobs Act a freelance is considered fake if:

• collaboration lasts more than 8 months for at least 2 successive years

• salary > 80% of total income for at least 2 successive years

• freelance has a “fixed” desk in the company

This does not apply to everyone subscribed to a professional register

56


Fixed regime

It’s a simplified VAT number regime (forfettario).

• no IRAP, no IRPEF. Fixed taxation: 15%

• no VAT at all (no compensation)

• earnings between €15,000 and €40,000

• no employees neither collaborators

57


Occasional work

• earns <€5,000

• no more than €2,000 from each customer

• fixed taxation: 20%

58


Fixed term agreement

• Lasts <= 36 months

• Can be briefly extended (30 dd if it last <6 months, 50 dd otherwise)

• Compulsory break between two contracts (60 dd if it last <6 months, 90 dd otherwise)

• Total employee cost equal to open ended employee agreement

59


Start-up ecosystems

60


Where should you incorporate?

61

(according to the Compass Global Start up ecosystem Ranking)

https://startupgenome.com/report2017/


Start-up ecosystem

62

A start-up ecosystem is formed by people, start-ups in their various stages and various types of organizations in a location (physical or virtual), interacting as a system to create new start-up companies

https://drive.google.com/file/d/0B3ImYgVnZqRQc1h5Z2dkRHRMMVE/view

https://en.wikipedia.org/wiki/Organization

7. Start-up in Italy & ecosystems63


Ecosystem lifecycle

64

7. Start-up in Italy & ecosystems65 https://99designs.co.uk/blog/business-en-gb/berlin-vs-london-best-city-for-startup-infographic/?lang=en-gb?lang=en-gb

8. Design & planning

YAPE

http://www.e-novia.it/en/yape-eldor-2/

https://youtu.be/zySD-4Q4sBo

69

Your Autonomous Pony Express

http://www.e-novia.it/en/yape-eldor-2/

https://youtu.be/zySD-4Q4sBo