ITALY Law and Practice Contributed by: Paolo Balboni, Luca Bolognini, Giulio Monga and Carmine Antonio Perri, ICT Legal Consulting
tection. For innovative start-ups, simplified templates are also used under the Start-up Innovative framework to streamline early-stage investments. Overall, while local adaptations exist to reflect Italian corporate law requirements, the documentation used in VC transactions is well developed and increasingly harmonised with international norms. 2.6 Change of Corporate Form or Migration While most Italian start-ups remain domestic dur- ing their early growth, a change in corporate form or jurisdiction often occurs at later stages to support larger-scale financing or international expansion. In fact, Italian start-ups generally remain incorporated as limited liability companies (Srls) during their early and growth stages, as this form provides flexibility and lim- ited liability while accommodating most VC structures. However, as companies expand and prepare for larger financing rounds or international investment, they are sometimes advised to convert into joint-stock com- panies (SpAs) to facilitate complex equity structures, stock option plans, or listings. 3. Initial Public Offering (IPO) as a Liquidity Event 3.1 IPO v Sale In Italy, investors in start-ups typically pursue a trade sale or secondary sale rather than an IPO. While list- ings on Euronext Growth Milan (EGM) are available, they remain limited to more mature scale-ups. Dual- track processes are still relatively rare, though interest has grown as market confidence improves. Overall, the prevailing trend continues to favour strategic or private equity sales as the primary exit route. 3.2 Choice of Listing The choice of listing venue is driven by company size, investor target and cost-benefit considerations, with domestic exchanges being the default option for most Italian start-ups. In fact, if an Italian start-up decides to pursue a public listing, it is most likely to list on a domestic exchange, typically EGM, which is tailored for small and mid-cap
companies and offers a regulatory framework suitable for innovative and high-growth enterprises. Listing on a foreign exchange is less common at the initial stage due to additional regulatory, disclo- sure and compliance requirements, as well as higher costs. However, dual listings on a domestic and for- eign exchange may be considered for larger scale-ups seeking broader international investor exposure or access to deeper liquidity, particularly if the company has significant cross-border operations or ambitions to attract global institutional investors. 3.3 Impact of the Choice of Listing on Future M&A Transactions Listing an Italian company on a foreign exchange can affect the feasibility of a future sale, as domestic mechanisms such as minority squeeze-outs may not apply. This can complicate full acquisitions follow- ing a tender offer. Companies typically address this through careful shareholder agreements and govern- ance structuring to preserve flexibility for future exits. 4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital- Financed Company) 4.1 Liquidity Event: Sale Process The method of sale chosen in a liquidity event large- ly depends on the size of the company. For Italian start-ups, sales are typically conducted through bilat- eral negotiations with a selected strategic or financial buyer, allowing confidentiality and control over terms. Auctions are less common but may be used for high- profile or competitive targets. For established companies, auctions are more fre- quently employed, engaging multiple potential buyers to maximise value and leverage competition. Bilateral deals remain an option for sensitive or long-standing relationships. 4.2 Liquidity Event: Transaction Structure Sales of privately held technology companies with VC investors are typically structured as share sales. The current trend favours partial or controlling-interest transactions, allowing VC funds the choice to exit fully
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