In recent years, alternative finance has been a growing resource for financing innovation in Italy. Instruments such as equity crowdfunding, venture debt, convertibles, SAFE, startup-oriented minibonds and public or mixed VC funds have complemented - and partly replaced - traditional venture capital. However, access to these channels is not uniform: there are geographical, sectoral and stage-of-development imbalances that strongly condition where capital arrives and where the ecosystem remains undercapitalised.
Geography of capital: North yes, South struggling
According to the most recent data published by CDP Venture Capital and AIFI, over 80% of investments in Italian start-ups are concentrated in Lombardy, Emilia-Romagna, Lazio and Piedmont. The Mezzogiorno remains marginal, even in seed rounds, despite the presence of PNRR measures and regional co-investment funds.
There are many reasons for this: the lack of structured incubators with track records, the weakness of entrepreneurial teams in equity-based fundraising, and a greater aversion to risk on the part of local investors. As a result, southern start-ups more frequently resort to subsidised finance (e.g. Invitalia calls, Smart&Start) or traditional bank credit, staying off the radar of private venture capital and alternative vehicles.
Favoured and neglected sectors
Investors tend to focus resources on highly scalable and more easily exitable verticals, such as fintech, B2B SaaS, healthtech and artificial intelligence. In contrast, sectors such as agritech, advanced manufacturing, hardware and culture are often underrepresented in deal flow.
The reasons range from the perception of lower scalability to the difficulty of structuring clear exits and attractive valuations for funds. In these neglected areas, some start-ups are seeking alternative paths such as guaranteed venture debt, early-stage project financing or minibonds supported by Confidi, CDP or SACE. However, these instruments require complex technical structures and qualified advisory, which makes them accessible only to a minority.
The start-up stage: who reaps, who is left out
Italy has a polarised ecosystem. Seed and pre-seed rounds are mainly supported by public capital (Smart&Start, CDP Accelerators Fund) and crowdfunding. Series A and B rounds remain scarce and concentrated, while growth capital is almost exclusively the prerogative of foreign funds or one-off operations.
In the context of alternative finance, venture debt is emerging, but remains reserved for start-ups with recurring revenues, clear unit economics or positive EBITDA. Convertibles and SAFE are popular instruments among business angels and micro-VCs, but require a good understanding by the founders and their advisors.
Minibonds for start-ups are still uncommon, but some operations are beginning to appear on the market. They usually require the intervention of an expert advisor, the establishment of SPVs or guarantee structures (e.g. co-subscription by public funds, SACE or Confidi) and minimum covenants.
The role of public policy: accelerator or stopper?
Public initiatives, particularly those of CDP Venture Capital and the funds linked to the PNRR, have significantly increased the resources available to Italian start-ups. However, several limitations remain.
Access procedures are often complex and discourage less structured teams. The constraint of private matching, often required to activate public funds, penalises peripheral realities where co-investors are absent. In addition, evaluation and disbursement times may be incompatible with the rapid cycles of start-ups.
Among the most relevant public instruments are the Accelerators Fund, the Start-up Relaunch Fund, and the National Technology Transfer Fund, the latter being particularly relevant for university spin-offs and research centres.
Conclusion: where to intervene
To reduce the gaps in access to alternative finance, action is needed on several levels. First of all, more flexible vehicles are needed, such as revenue-based financing instruments or simplified venture debt models, for start-ups with less linear growth cycles. Then, we need to promote local underwriting models, through regional funds or evolved Confidi, capable of evaluating even non-digital-native projects.
It would also be useful to promote technical training courses for founders and advisors on alternative finance instruments, and to standardise contractual documentation to speed up closing times. Finally, greater integration between public instruments and private investors - on a truly collaborative and transparent basis - is needed to make the entire ecosystem scalable.