There are several differences relating to various aspects. Epic is for established companies, not only innovative startups and SMEs, as it happens with crowdfunding. On Epic there are not just equity investment opportunities, but debt ones too, and there is no cap to the transaction amount, which is set by the issuer. Investment opportunities on Epic are reserved to qualified investors, both institutional and private, classified in compliance with MiFID/Consob requirements: the classification process is carried out directly by Epic. Finally, Epic is an investment company authorized and regulated by Consob and Bank of Italy as, as such, must comply with rules on investment services and anti-money laundering.
The conditions of the bond may include special covenants covering non-repayment, which will be different depending on whether it is simply a delay or is due to the issuer's default.
Foreign investors can join Epic too and send indications of interest. Based on our experience, in most cases those will be indirect investments, i.e. foreign investors will buy units of specialized funds that in turn invest in Italian SMEs. This is mainly due to a reduced capacity to thoroughly analyze individual issuers. There are of course some foreign funds specialized in SMEs that have set-up a specific fund dedicated to Italy.
The issuer has the right to set a minimum amount above which the transaction can be closed even if the target amount has not been reached.
The actual duration of the operation clearly depends upon the length of the offer period. For bonds, for example, we expect about 10-12 weeks to elapse between the date when the company’s documentation set is completed and the settlement date.
Certainly. Epic gives the company full discretion in granting investors' access to its dataroom, where classified information is available.
The documentation prepared by issuers is reviewed by Epic only in order to comply with its internal standards. However, Epic does not provide any assessment on the quality of the company.
Certainly. The issuer has full discretion in accepting or rejecting any indications of interest and pick up investors with whom the transaction can be closed.
The minimum investment amount varies depending on the terms and conditions of the securities: for example the standard minimum trading size for bonds on Epic is Euro 10,000 Euro, but there can also be bonds with minimus sizes of 50,000 or 100,000 Euro.
You must take into account the risks associated to securities issued by small and medium-sized enterprises, including in particular the very low liquidity. In order to diversify risk, it is appropriate to limit the total exposure to securities issued by SMEs, for example, to a maximum of 10% of the portfolio and to limit exposure to a single issuer to a maximum of 2% of the portfolio.
The logic of these securities is to create an alternative channel to traditional bank funding, they thus represent a typical "buy-and-hold" investment, rather than a trading investment. The market is currently very illiquid and so you may have to consider the possibility of keeping the bonds in your portfolio until maturity.
The financial instrument is one and only has an ISIN code. The final conditions will therefore be the same for all subscribers.
On the company profile page there’s an overview of the business, the relevant industry, some historical key financials and a presentation of the key managers. In the reserved area (the Dataroom) you will find the detailled business plan, the draft termsheet and the rating report.