ITALY Law and Practice Contributed by: Silvia Bordi, Emanuele Bosia, Federico Dettori and Rodrigo Boccioletti, Gianni & Origoni
When start-ups do pursue an IPO, the timing is typically driven by revenue growth, market traction and investor readiness rather than fixed timelines. Companies seek to establish profit - ability or at least demonstrate a clear growth tra - jectory to meet listing requirements and attract institutional investors. Among listing venues, the Euronext Growth Milan (EGM) (formerly AIM Italia) is the most commonly chosen platform for start-ups and growth companies. EGM offers simplified access rules, reduced regulatory burdens, and lower costs compared to the main Italian Stock Exchange ( Borsa Italiana ). This venue targets dynamic small and medium-sized enterprises (SMEs) seeking capital for expansion without undergoing the full compliance requirements of a regulated market. Offering structures often involve a mix of new share issuance to raise capital and partial exits by existing shareholders. However, the limited liquidity and lower investor appetite for small- cap stocks in Italy continue to make IPOs a less prevalent exit choice, with many companies viewing them as a long-term goal rather than a primary strategy. 6.3 Pre-IPO Liquidity There is a tangible but still developing market need for secondary liquidity mechanisms in Italy, especially given the relatively infrequent IPOs and strategic exits. Founders, early employees and seed investors often seek partial liquidity before a formal exit, particularly as start-ups scale and raise successive funding rounds. However, the fragmented nature of the Italian venture ecosystem and regulatory complexities have limited the widespread development of structured secondary market programmes.
Key challenges include the legal structure of Ital - ian companies, particularly S.r.l., where quotas are not freely transferable and often require notar- ial deeds for transfers. This creates procedural and cost barriers to establishing efficient sec - ondary trades. Furthermore, contractual transfer restrictions such as rights of first refusal, lock-up periods, and pre-emptive rights can complicate or delay liquidity events, requiring careful naviga - tion of existing shareholders’ agreements. Legally, any structured liquidity programme must respect these internal company rules, Ital - ian civil code provisions and applicable financial regulations if securities are involved. Such pro - grammes typically require tailored amendments to shareholder agreements, explicit waivers of certain rights and possibly the creation of special purpose vehicles or buyback schemes facilitat - ed by the company itself. Company-facilitated tender offers are one of the few tools that have gained some traction, espe - cially in later-stage companies. They allow the company or new investors to repurchase shares from early stakeholders, providing liquidity while maintaining control over the cap table. However, their use remains relatively limited and ad hoc, reflecting the need for further market maturation and regulatory clarity around secondary transac - tions in Italy’s venture landscape.
7. Regulation 7.1 Securities Offerings
In Italy, the offering of a company’s equity securi - ties in a VC transaction is governed primarily by the Italian Civil Code, the TUF and the relevant corporate regulations, particularly when deal - ing with significant transactions or numerous employees and entitlement holders.
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