Opportunities and incentives for internationalisation

Opportunità e incentivi all'internazionalizzazione

There are many ways for your company to financially support its growth and development process, as well as commercial penetration outside Italy. The sources of funding are not subject to a hierarchy; however, each source shows the "pros" and "cons", or distinctive characteristics that make it more or less suitable and/or attractive to the entrepreneur.

In addition to bank credit and self-financing, new sources have gradually emerged, such as the use of external investors: "informal" (angel financing), "institutional" (private equity and venture capitalists) or "market" (through the tool of listing). For those reasons, new forms of financing have arisen which, given the increasing difficulties of accessing bank credit (especially for innovative start-ups), presuppose that fundraising takes place through the use of the community (crowdfunding).

In the context of internationalisation projects, one of the main and traditional tools made available to banks is undoubtedly the opening of credit and the loan agreement. Both tools, however, appear to be more geared towards covering the temporary imbalances (between income and cash outflows) generated in the management of the enterprise, rather than financing a commercial development and expansion project because they do not encourage companies to put in place adequate financial planning interventions but to manage their liquidity "day by day". Other tools made available by credit institutions are, on the other hand, more suited to the needs of a company which intends to operate internationally. One of them is the opening of standby credit lines, which allow the company to access, under certain circumstances and within certain limits, bank financing.

Unfortunately, the banks did not prove themselves as an adequate source of financing for the company where the object of the financing is not the company itself, but "innovation". It is precisely because of the weak support provided by banks that other tools, which gravitate around the banking system, have arisen for example, such as credit consortia, collective guarantee consortia, which are constituted by small and medium-sized enterprises with the function of providing guarantees for the entrustments requested by their associates to the affiliated banks.

The Business Angels (or Angel Investors) are former business owners, active or retired managers, who invest their resources (financial and experience) in small or newly born enterprises, but with high growth potential through a share-type contract, or through the purchase of shares in the company being financed. The goal of Business Angel is to contribute to the economic success of a company and, of course, generate capital gains. Participation in the company is in fact acquired on the basis of the expected return on capital in the medium and long term, as well as the personal interest and the particular affinities for certain projects, market sectors or geographical areas. They are organized mostly in local networks, known as B.A.N. (Business Angels Network), or permanent structures that connect "Angels", looking for projects and business opportunities and "Entrepreneurs" in search of capital and managerial skills.

Venture capitalists, like Business Angels, only intervene in the initial and start-up phase of the enterprise, financing and supporting it with its managerial knowledge and skills against the acquisition of shareholding, with the aim of increasing its value. They operate as real financial intermediaries. In addition to financing the company, they support its management in making the most delicate decisions that affect the early stages of life of the project.

Private equity, such as venture capital and angel financing, also consists in the acquisition of shares in a company by the entity (the Fund) that finances it and that offers managerial support. The substantial difference is that, in the case of private equity, the financing is provided in the stage of maturity and development of the company and not in its initial life phase. The term "Private Equity" generically indicates the investment activity in venture capital of non-listed companies, carried out both "informally" by private parties (informal private equity) and professionally by specialized institutions, usually mutual funds (formal private equity).

Crowdfunding is based on the strength of ideas, the importance of the community and the opportunity to leave the decision to the community whether a product is worthy to be created and marketed. It consists in the possibility for the entrepreneur to promote on a telematic platform a product or a service which he intends to produce, lend or market; by identifying the amount "target" that you want to collect for the realisation of the project, you can make possible for visitors on the platform, to varying degrees, to support the project by contributing financially to it (crowdfunding) or by providing services (crowdsourcing). Last but not least is the use of easy finance, where, with the term "easy finance", it identifies the whole of the tools used by the legislator to facilitate companies in finding financial resources on more favourable terms than those generally available on the market. In this regard, for example, the drafting of network contracts may be cited, whereby two or more companies undertake to carry on jointly one or more economic activities falling within their respective social objects, with the aim of enhancing mutual innovation capacity and market competitiveness.

For further information, please consult the website of the ICE Agency

Updated on 07/07/2020