Ethical financing and Equity Crowdfunding: here is the combination proposed by LITA for the investments of the future
100 billion dollars. This is the amount of resources invested so far in the Impact Investing sector in the field of Impact Investing according to the latest report from the Global Impact Investing Network.
What is the Impact Investing? It is nothing more than a new way of investing that arises as an alternative ethics to traditional finance, collecting the motivations of investors not only interested in a financial annuity but also for social and / or environmental purposes for their investments.
These are therefore investments that have in common the characteristic of being sustainable and responsible that, however, unlike philanthropy, still provide for economic returns. These can also be market (in the case of the Impact Investing finance first) or controlled (in the case of the Impact Investing impact first).
This type of ethical finance is also taking hold thanks to the combination with Crowdfunding (in particular, Equity Crowdfunding) the fund finding fund from the low possible yields also to the creation of platforms such as the Turin LITA.co.
What is LITA.co ? How does it work? Let’s find out together in the paragraphs that follow!
What is LITA.co
The LITA.co platform, regularly registered in the ordinary section of the Register of online portals for the collection of risk capital held by Consob, is the first all-Italian platform of Equity Crowdfunding dedicated to entrepreneurial projects with a high social and environmental impact.
The project – as the Founders of the company declare – aims first of all to bring citizens closer to the world of finance, giving it a new meaning.
How does LITA work
LITA platform therefore aims to bring together companies interested in carrying out innovative growth projects, with investors who instead intend to measure the value of their investment not only in terms of economic profit but also and above all in social terms.
In this way, those who invest will choose the projects on which to invest based on the topics that are most important to them and the impact that these themselves have on society. Another peculiarity of the Impact Investing is that the social impact or degree of sustainability must be in some way measurable. For example, in the case of investment in SMEs, the impact can be measured through the number of jobs of new jobs created and stored.
As Equity Crowdfunding, the return or reward that will be up to the investor at the end of the collection will be the participation in the tendering company through the acquisition of company shares.
But that’s not all. Sustainable investment, within the LITA crowdunding, also means transparent, safe and fully responsible investment by those who invest, who, thanks to the quantity and quality of the information provided by the platform, is able to choose the most appropriate projects based on its risk profile and financial resources.
Each project is, for example, accompanied by an assessment on the degree of maturity of the company (Seed or Start Up) that allows you to correctly evaluate from the beginning the degree of riskiness of your investment as well as remuneration and benefits also in tax terms.
Which projects can be admitted to the collection
All projects eligible for fundraising are designed to promote sustainable, economically efficient and/or socially equitable development based on one or more of the 17 objectives set by the UN such as:
- Health and Well-being
- Defeating the hunger
- Defeating poverty
- Quality education
- Gender equality
- Clean water and hygiene
- Clean and accessible energy
- A dignified work and economic growth
- Industry, innovation and infrastructure
- Reducing the inequalities
- Sustainable cities and communities
- Responsible consumption and production
- Acting for the climate
- Life under water
- Life on Earth
- Peace, Justice and Strong Institutions
- Partnerships for the objectives
In particular, the various investment initiatives published in LITA Crowdfunding are then divided into 5 macro areas that are:
- Tech for good, which allows you to invest in start-ups with real growth prospects by funding innovative and revolutionary projects;
- Sustainable real estate, which instead allows you to invest in social and eco-sustainable real estate projects by financing the construction of ecological living spaces and that can guarantee everyone the right to a decent home;
- SMEs, where instead the recipients are mature companies that have reached significant dimensions and the purpose of the investment is usually the creation and/or consolidation of jobs;
- Renewable energy, an area in which you can participate in the financing of new energy parks with clean energy such as solar, wind, hydroelectric or biomass;
- Land development, where instead you are allowed to invest in the development of positive initiatives in your neighborhood, in your city or in your region promoted by local SMEs.
Finally, it should be noted that on the home of the site the projects are also divided on the basis of two other criteria:
- Projects in the vote: it is actually a simple “coming soon” of the offer in which only basic information is provided on the campaign, however not enough to accrue an investment decision. At this stage, in fact, there is no collection of money but users still have the possibility to express their interest in the project by requesting to be included in the mailing list that will alert them to the actual start of fundraising. The vote, while assuming the user’s interest in deepening the information in the future and possibly investing, is not binding or determining any pre-emption or other type of right with respect to other users;
- Collection: actual publication of the project on the platform, presented through a standardized model of easy reading and easy comparison between the different campaigns. This phase has a predetermined duration and a specific minimum collection goal to be reached in a given time window to be able to say ended successfully.
How to invest with LITA.co
To start investing with LITA you must first proceed with the registration to the portal. Once this step is completed, you can proceed with the visualization and selection of the project or projects on which you intend to invest.
You can also filter Impact Investing campaigns based on the type of impact (social or environmental or both) or depending on the macro area.
However, only after registering with the LITA platform will it be possible to view all the documents concerning the collection and proceed with the investment. The investment order will become operational only after the investor has also carried out the following assets:
- Confirmation of the reading and acceptance of the General Conditions;
- Indication of the amount of the Order;
- Subscription of the Investment Agreement;
- Confirmation of the awareness and acceptance of all documentation relating to the investment.
Also completed these steps, all information relating to the Investor and Order is transmitted by LITA to the Financial Intermediary which is Banca Sella.
The Financial Intermediary will immediately issue to the portal a corresponding payment identification code that will also be communicated to the investor together with the instructions to be able to make the payment.
What is the minimum and maximum capital to invest?
It is not LITA.co to establish the minimum and maximum limits within which to invest, but it is the tender companies that do so by indicating them within the presentation form of the campaign together also the duration and the goal (minimum / maximum) of collection
By taking a look at the individual projects currently present you will realize that these limits are extremely variable. There are projects that provide a minimum investment of 10 or 20 €, while others start already from 500 € to reach a maximum of €100,000.
Are there facilities planned?
One more reason to answer the question why invest with LITA it is given by the fact that investing in innovative Start Up and SMEs or in social enterprises entitles us to certain tax incentives.
With regard to Innovative Start-ups and SMEs:
- In the case of natural persons, a deduction from the IRPEF tax of 30% of what was invested applies, for a maximum amount of € 1,000,000 per year and the obligation to maintain the investment for a minimum of 3 years;
- In the case of legal persons, a deduction from the IRES taxable amount of 30% of the amount invested applies, for a maximum amount of € 1,800,000 per year and the obligation to maintain the investment for a minimum of 3 years.
As regards social enterprises:
- Natural persons can benefit from a deduction from the IRPEF taxable amount of 30% of what was invested, for a maximum amount of € 1,000,000 per year and the obligation to maintain the investment for a minimum of 5 years;
- Finally, legal persons can benefit from a deduction from the IRES taxable amount of 30% of what was invested, for a maximum amount of € 1,800,000 per year and the obligation to maintain the investment for a minimum of 5 years.
What happens if you don’t reach the collection goal
When the collection objective is not reached within the deadline set, the Financial Intermediary (Bank Sella) at the request of LITA will arrange the return to the Investors of the sums of the unextted Investment Orders.
How to register on LITA.co
In order to proceed to the registration on LITA.co crowdfunding you have to go to the site and access the registration format in which to enter your data.
After also ticking the three points related to the conditions of use, Privacy Policy and Newsletter of LITA.co, you will enter the platform and as a first thing you will be asked to fill in a “questionaire for the evaluation of appropriateness” subject to annual updating. This step required by Consob is essential to establish customer/investor profiling on the basis of the level of knowledge and investment experience.
The questionnaire consists of 7 multiple choice questions, which are the input for the investor’s appropriateness verification algorithm. Each specific response is associated with a certain score.
The sum of the overall score of the questionnaire questions determines a result between 0 and 30. Based on the score generated, the user is associated with a different investor profile for each of which is assumed an increasing level of experience/knowledge in the investment (from 21 to 30 ALTO, from 11 to 20 MEDIUM, from 0 to 10 BASSO).
How to top up your account on LITA.co
To invest in LITA it is not necessary to open any account either on the portal or at the Financial Intermediary (Bank Sella). The investor must in fact limit himself to making a transfer from his current account indicating in the reason the identification code issued at the conclusion of the Investment Order.
This code will be used by the Financial Intermediary to carry out the automatic reconciliation of the transfers received. Payment can also be made through a credit card, in which case the payment result is updated in real time on the portal, and payment is automatically reconciled by the Financial Intermediary.
Following the notification of confirmation of receipt of payment, the Investor is sent to the Investor confirmation of the Order. At the end of the subscription orders collection period, the platform will send the Financial Intermediary the operating instructions for the finalization of the Offer.
Is LITA.co safe?
In order to answer the question of whether you are investing with LITA is safe or not, you must first analyze how the collection project selection process takes place. In fact, we know that the supplying companies are in most cases SMEs and innovative Start UPs, therefore characterized by a high degree of risk.
However, LITA carries out a careful selection of all the projects admitted to the start of a collection campaign.
In fact, companies must be able to demonstrate:
- Legal requirements to carry out an Equity Crowdfunding campaign (administrative/legal information);
- Growth Perspectives (Business Plan);
- Ability to pursue a quantifiable objective of social and/or environmental impact;
- Ability to respond to your value chain (ESG).
After this phase, the project is presented by the offer to the Investment Committee itself, an independent body composed of authoritative representatives of the world of entrepreneurship, finance and the social economy called to express themselves on the publication of the individual projects on the platform.
The selection criteria in this case base both on financial analysis and on extra-financial analysis:
- The financial analysis consists of a classic verification of consistency, reliability and sustainability of the content of the Business Plan;
- The extra-financial analysis consists instead of an assessment of the social and environmental performance that the company intentionally aims to generate. The output and outcome indicators for performance measurement are defined on the basis of the specific characteristics of each company and explained in the form of key performance indicators (KPIs).
Only by obtaining excellent scores and evaluations at the level of both analyses will it be possible to proceed with the approval and publication of the Offer.
What are the opinions on LITA.co?
In general, the Lita opinions present online are positive, the portal has in fact to its assets 12,813 investments made, for 4,308 jobs created or consolidated and 35.6 million euros collected.
The project, all Italian, was also enthusiastically received by the press of the sector and by the supporters of crowdfunding and innovative Start Ups. Undeniable that an extra push to invest in this platform is also given by the presence of tax incentives aimed at those who invest in Start Up projects and innovative SMEs!
Undoubtedly, LITA.co is a truly innovative portal, which manages to combine crowfunding and Impact Investing together, two new ways of investing that I certainly like and that we recommend you keep an eye on for the future because they will certainly have further developments!
