The startup innovative 14,708 are registered in the special section of the business register, the highest number ever. The third quarter of 2022 confirms the growth trend of this type of company which, since it was introduced into our legal system with the law decree 179/2012, has continued to be chosen above all by the new generations. In fact, over 2,600 are made up of under 35s, 17.9% of the total, 3 percentage points higher than non-innovative companies (14.5%). Furthermore, if we consider the innovative startups in which at least one young person is present in the shareholding structure, these amount to 41.3%, against 31.4% of the other companies. The same special section of the business register also contains the PMI innovative. They have slightly different characteristics compared to innovative startups and were introduced with article 4 of the law decree 3/2015.
The main characteristics of an innovative startup
In order to obtain the status of innovative startupjoint-stock companies must:
- have one based in Italy;
- to have been established for less than 5 years;
- not be listed;
- have an annual turnover of less than 5 million euros;
- dealing with innovative products or services with high technological value;
- be in possession of certain requisites relating to technological innovation as indicated by art. 25, paragraph 2, of Legislative Decree 179/2012.
Among the latter, there is the obligation that at least 15% of turnover be directed to research and development. Alternatively, the workforce must consist of at least one-third PhD students, PhDs or researchers. A requirement that can equally be fulfilled if at least two thirds of partners and collaborators have a master’s degree or if the startup has its own patent or registered software. Additional constraints for innovative startups are the non-distribution of profits. To which is added the fact that their establishment did not take place following a merger, demerger or transfer of a company.
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When an SME can be defined as innovative
Innovative SMEs are subject to less stringent criteria compared to startups, starting from the innovation profiles that refer to internal skills, processes and products. Therefore, they don’t just offer an offer with a high technological value as in the case of innovative startups. Furthermore, neither the temporal delimitation (having been established for less than 5 years), nor an annual turnover of less than 5 million euros is not envisaged for innovative SMEs. Just as the limit of non-distribution of profits or non-origin from a merger, demerger or transfer of a company does not apply. In addition to having an office in Italy and at certification of the last budget (requirement absent in startups), SMEs must meet at least 2 of the following requirements:
- and volume of expenditure in research and development equal to or greater than 3% of turnover;
- a total workforce made up of at least a fifth from doctoral students, PhDs or researchersor by a third of people with a master’s degree;
- be the owner of a patent or of a registered software.
Financial transactions for startups and innovative SMEs
The fact that both categories are recorded in a specific section of the business register explains why not all of them necessarily operate in the ICT sector. This does not mean that those registered in October 2022 correspond to more than half of the total (8,416). Instead, to get an idea of the sectors of activity, one can consult the latest survey by the Ministry of Enterprise and Made in Italy. According to the report, 76% deliver business services15.5% are engaged in manufacturing and 3.1% in the trade.
The same report provides an overview of the financial transactions involving innovative startups and SMEs, with particular regard to transactions managed through the Guarantee Fund for Small and Medium Enterprises (FGPMI). In the third quarter of 2022, loans of 1.9 billion euros were disbursed and the Fund guaranteed more than 1.5. In the same period there were more than 1,400 beneficiary companies, for an average loan value of over 328 thousand euros, against an average duration of the loan of approximately 51 months. Furthermore, still in the same period, the operations managed by the Guarantee Fund towards certified incubators were 107 for a total potentially mobilized of almost 48 million euros.
The concessions for startups and innovative SMEs
Access to the Guarantee Fund
Legislative Decree 179/2012 has provided for a access to the simplified and free Guarantee Fundthrough a priority channel, for both startups and certified incubators. The guarantee covers up to 80% of the loan disbursed by the bank, for a maximum of 2.5 million euros. Mediocredito Centrale, the managing body of the Fund, does not carry out any creditworthiness assessment with respect to that of the bank. Furthermore, credit institutes cannot request collateral, insurance or bank guarantees, on the part of the loan guaranteed by the Fund, but they can do so on the entrepreneur’s personal assets for the entire amount of the loan. This measure was strengthened by the “Liquidità” Decree Law, converted into Law 5 June 2020 n. 40, which introduced the 80% to 90% coverage and raised themaximum amount guaranteed from 2.5 to 5 million euros.
Similarly, for innovative SMEs, access to the Fund follows what is contemplated for innovative startups, but with two important differences. Firstly, the former are subject to creditworthiness by the Fund and, secondly, innovative SMEs are denied access to the Fund if they are classified in the lowest creditworthiness bracket.
Benefits of a bureaucratic and fiscal nature
In terms of bureaucratic and fiscal benefits, innovative startups and SMEs share some exceptions to the ordinary corporate regulations, including extension of the deadline for covering losses and derogation from the regulations on shell companies and systematically loss-making companies. Also, they can remunerate workers with stock options as well as advisors through forms of work for equity. This system consists in rewarding the work of consultants through the assignment of quotas or shares of the company. In this way, companies can receive services necessary for the development of their business without having to bear costs that could be exorbitant. With the advantage that, as partners, the consultants have an additional incentive to achieve positive results that they themselves will enjoy.
Finally, innovative startups and SMEs can benefit from the internationalization services provided by the ICE Agency, are exempt from paying stamp duty for deeds filed with the Chamber of Commerce and can involve investors in their risk capital to whom they are recognized specific tax incentives.
Innovative startups and SMEs, latest news
Smart&Start Italy programme
Since last year, the Smart&Start Italy programme promoted by Invitalia. It deals with financing innovative startups, with projects between 100 thousand euros and 1.5 million euros, provided that the company has not been established for more than 60 months. In addition to the loan, which companies have the option of partially transforming into a non-repayable grant, technical-management tutoring is provided for innovative startups that are less than 12 months old.
The European Fund of Funds arrives
For innovative SMEs and “tech champions”, a new one was launched in February 2023 Pan-European fund of funds within the framework of the ETCI (European Tech Champions Initiative). The latter is promoted by the EIB Group (European Investment Bank) and by the European Investment Fund in collaboration with Italy, Germany, France, Spain and Belgium. The ETCI aims to strengthen the European risk capital markets under development scale-up, filling a gap for those innovative companies aiming for financing of amounts exceeding 50 million euros. For this purpose, the Fund pools the public resources of the Member States mentioned above and of the EIB Group.
The initial commitment sees an investment of 1 billion each by France, Germany and Spain, while Italy participates with 150 million and Belgium with 100. In turn, the EIB Group has allocated a further 500 million euros, for a total amount of 3.75 billion euros. The idea is to make the old continent a propitious place for nurturing and the development of an entrepreneurship with a strong innovative imprint. This is the only way to solve the problem of lack of capital which often makes our tech companies less competitive on the international stage.