In the ecosystem of CDP Venture Capital Funds, the Rilancio Startup Fund stands out for its unique format, based on the meeting between investors and start-ups. What's the rationale behind this format?
"The Fund intends to give a further boost to the ecosystem of start-ups and SMEs, multiplying an initial investment already obtained by other entities who believed in these companies. The Fund, therefore, leverages on two levels of trust: the former aimed at the companies receiving the resources, and the latter at the investing shareholders, who support the development of these companies'', explains Caterina Siclari, Fund Manager.
From a technical point of view, therefore, the Rilancio Startup Fund is a form of co-matching. The resources, amounting to 200 million euro, are allocated by the Ministry of Economic Development and are managed by CDP Venture Capital. This formula was created to accelerate the disbursement of resources to start-ups at a particularly critical moment, namely after the closures imposed by the first lockdowns.
"The choice to focus on investment proposals that have already gained the trust of regulated and qualified players allowed us to streamline the formal steps, conductinga targeted due diligence and ensuring the speed required by the Fund's mission", Siclari remarks.
"In fact, the Fund offers an important opportunity: the possibility of multiplying, up to four times, the capital placed on the market by qualified investors, with a maximum threshold of one million euro. And we believe it is an important lever for the overall market growth".
The Fund objective is to reward all those innovative companies that have development programmes geared towards the future.
“According to the Ministry of Economic Development’s decree, one of the requirements to be met by the companies receiving the grant is to present sustainable business plans”, continues Siclari.
However, the presence of a sustainable development plan, which includes new hires and performance targets to be guaranteed, may not be enough to finalise the Fund's investment.
"It is certainly the main requirement for companies to apply, but sometimes it is not enough; a solid commitment must emerge from the team, along with clear strategic choices and quality of execution."
What are the Fund's distinctive features that make it stand out from other CDP Venture Capital instruments? And what are the points of contact with the ecosystem?
"The Rilancio Startup Fund has some peculiarities compared to the other CDP Venture Capital instruments, because it has resources available exclusively from the Ministry of Economic Development and therefore greater responsibility over investment terms", explains Siclari, "but, as we have mentioned, the leverage effect is an interesting option that we can put in place”.
On the other hand, however, the Fund invests with a participatory financial instrument: "we do not acquire any equity, and as such we are not shareholders of the company at the time of entering into the agreement, we can become one uponthe occurrence of a conversion event. In this sense, it is not a sunk cost kind of investment, we invest because we believe in the company’s potential and it is also important to point out that the investment granted will not need to be repaid".
Therefore, it represents a gradual way of entering into an innovative start-up or SME, backed by a comprehensive and ongoing analysis: "we know the teams, we interface with the investors: we try to understand what elements led them to invest in the project and, to us, this is important, in order to consistently fulfil the mandate entrusted to us by the Ministry of Economic Development”.
To clarify: “having a partner (and not a shareholder)like CDP, namely an institutional player, is an intangible asset that goes a long way towards qualifying an innovative company. And, in turn, attracting other investments”.
According to the latest available figures, the Fundhas succeeded in involving over 800 investors and has analysed and approved over 100 start-ups. This suggests that there are many entities willing to bet on innovative Italian companies.
"Absolutely, there are many investors (business angels, family offices, venture capitalists, accelerators and incubators) who believe and invest in start-ups", says Siclari: but it is a prerequisite if one intends to accelerate the growth and go-to-market process of innovative projects.
“Investors register on the Rilancio Fund platform, demonstrate their track record, prove to be a qualified or regulated investor, and, once accredited, they can apply for the company in which they invested or will be investing. So it is the investor that presents the opportunity to be evaluated, and this is important, because the companies that come to us already have experience and are familiar with the dynamics of venture capital, having already interfaced with other investors”.
Italy has a vivacious ecosystem with some interesting growth prospects: "Surely there are good intentions out there and we are, as Rilancio Startup Fund, an active part of this evolution".
The Fund will have a duration of 10 years, what are your objectives until 2030?
"By regulation we have 10 years, yes, but I believe that the Fund's objective is to give a quicker impulse", continues Siclari, "because today companies need liquidity and - if a company has solid foundations and a consistent development plan - we must be by their side".
Therefore, the ambition seems clear: "the future of the Rilancio Startup Fund is to continue with this trend and to shorten the Fund's lifespan".