Do Buy/Sell Ads Work on Equity Crowdfunding Portals? The Experience of CrowdFundMe

CFM Board, CrowdFundMe’s electronic bulletin board for the exchange of company shares or quotas, from the month of its launch last February to June 8th, has 819 sale announcements published (of which 159 are active) for a counter value of over $5.5 million (€4.6 million). In the same period, 1,500 purchase alerts were registered. This was reported by CrowdFundMe itself on its website.

The Consob regulation does not allow portals to follow the negotiations between the parties and to know the details of the outcome, but CrowdFundMe states that many investors have expressed full satisfaction with the effectiveness and ease of use of the electronic bulletin board, through which they have concluded purchases and sales relating to both Srl and Spa.

The bulletin board facilitates the liquidity of financial products placed by CrowdFundMe, allowing the meeting between the supply and demand of shares or quotas of companies that have successfully concluded a capital raising. All investors who own units or shares placed by the portal, can in fact publish offers on the electronic bulletin board to resell them online, deciding the price independently and negotiating directly with possible buyers.

Read more about the CrowdFundMe bulletin board and find the most important business headlines of the day with the Born2Invest mobile app.

Therefore, the bulletin board is a tool of further flexibility for investors who thus have the opportunity of an early monetization of their securities to realize potential capital gains

At the basis of the decision to sell a shareholding, in addition to the objective of demobilizing part of his own invested capital, the investor may also have that of modifying the composition of his own portfolio, reinvesting the capital obtained through CFM Board, to invest in other opportunities that in the meantime have been offered on the platform.

In case the investors’ shares are rubricated, the buying and selling process is necessarily faster and less expensive. Rubrication is an alternative regime defined by the Testo Unico della Finanza (TUF art. 100 ter) that allows those who have joined an Equity Crowdfunding campaign to give a financial intermediary – Directa SIM in the case of CrowdFundMe – a mandate to subscribe to and manage the shares on their behalf. The use of this alternative regime allows the potential profit to be maximized, since it makes it possible to avoid the costs of accountants (in the case of innovative companies) or notaries, whose fees can range from around 200 euros for the former to 500 for the latter (plus tax charges) for each exchange.

CFM Board allows the resale of both registered and unregistered shares and the platform claims to have received reports of capital gains from investors in both cases.

It should also be noted that, in the case of a capital gain, the profit is subject to the tax breaks obtained for investments in innovative startups or SMEs, if the shares are held for at least 3 years (here Crowdfundme’s guide to 2021 deductions).

In its blog, CrowdFundMe interviewed an investor, not named for privacy issues, who wanted to share the results obtained through the monetization of his portfolio assets, reporting it in the table below:

CFM Board sales table of an investor

In the interview, the investor says that using CFM Board is easy and intuitive, even if you have to spend some time on it: you have to negotiate with the potential buyer to reach an agreement, which can happen in a day when you find the deal right away, or in a week or more if the negotiation gets complicated.

One aspect of CFM Board that is particularly appreciated is the possibility, after concluding the trades, to manually record the sales made in the “sell shares” section of one’s account, so as to keep the portfolio’s progress updated and monitored.

Finally, for the interviewed user, CFM Board has allowed him to change, at least in part, his investment strategy: “if before I used the CrowdFundMe platform only with a long-term time horizon, since the electronic bulletin board is active I have the possibility to think, when I think it is appropriate, also in the short term.

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(Featured image by geralt via Pixabay)

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First published in Crowdfunding buzz, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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