Equity investments: characteristics and motivations

Equity investments: characteristics and motivations

23 August 2021

APPROFONDIMENTO

INVESTIMENTI

EQUITY CROWDFUNDING

An "equity-based crowdfunding" investment sees an online operation in which you buy a share in a company: in practice, the "reward" for the funding received by the company is represented by the company share and the patrimonial and administrative rights that derive from it, depending on the amount invested.

The characteristics of the investment:

Compared to a "classic" financial product, the investment on an unlisted company, through equity crowdfunding, has precise characteristics:

  • A high potential for economic return, which is accompanied by the risk of loss, if the investment is not optimized by creating a diversified portfolio in as many sectors as possible.
  • The timing: investments in unlisted companies are typically medium to long term. As they are companies that have been on the market for less than 5 years, they need time to acquire enough stability to allow them to be acquired and/or to be listed on the stock exchange.
  • Illiquidity: the lack of a secondary market on which to buy or sell shares makes it difficult to sell them, which is why their liquidation is often entrusted to medium- to long-term methods, such as a company exit or a stock market listing. To today however there is a possibility in more in order to facilitate the sale or the exchange of the quotas, draft of the service of Listingservice, available on many of the active campaigns on the platform.

What motivations drive us to invest in unlisted companies?

There are many reasons for investing in unlisted companies, both objective and subjective, as described by our investors:

  • economic if there is the possibility of future earnings
  • an "emotional" factor, when one is passionate about the business and is already a user/customer of the company
  • participating in the growth and development of the real economy of the country
  • diversification of one's investments, acquiring holdings in several sectors
  • tax benefits in the case of innovative start-ups and SMEs
  • attraction to innovation, in any form, especially when the technological or innovative component is the main driver of the company's business.

What will be the trigger for your motivation? Find out by visiting our "Invest" page.

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