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Startup completes first equity crowdfunding drive in Italy

By Naomi O'Leary

ROME (Reuters) - A software firm has become the first Italian company since the country introduced a pioneering crowdfunding law to raise target capital from investors buying equity through an online portal.

Rome was an early mover in implementing a legal framework for equity crowdfunding, passed as part of a 2012 package of laws intended to encourage startups, which the government sees as a way to boost growth and employment in a struggling economy with record joblessness.

Equity crowdfunding resembles services offered by online fundraising sites such as Kickstarter, through which creative projects gather donations from supporters. It offers those who give cash non-listed shares in return for their investment.

The startup, Diaman Tech Srl, raised 157,780 euro ($217,500), exceeding an initial target of 147,000 euro from 65 investors in a three-month fundraising effort that concluded on Monday on online platform Unicaseed, the website shows.

The European Union sees equity crowdfunding and peer-to-peer lending as a way small businesses and startups can access elusive credit as banks rein in their loan books and hike their capital holdings to meet stricter regulations.

The potential for equity crowdfunding was underlined when Facebook paid $2 billion last week for Oculus VR Inc, a virtual reality platform that got started with small donations from thousands of people on Kickstarter.

Its earliest backers were given t-shirts in return for their investments. Kickstarter does not allow projects to offer equity or solicit loans.

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Diaman Tech develops software that analyses potential investments. Its chief executive Daniele Bernardi said its 65 investors included several small banks, and now own 20 percent of the company between them in 300 shares.

Six of these bought more than 20 of the share packages, which cost 490 euros each, meaning they will have voting rights on the board. The funds raised will be used for software development, selling the software and marketing.

"If things go well, though it will be hard, our idea is to list on the AIM stock exchange within three years," Bernardi said, referring to the London exchange for smaller, growing companies. He also hopes to offer investors dividends in the future.

Though convincing the dozens of investors took months of work, all can buy Diaman software at a discount, and Bernardi said an advantage of crowdfunding was that it allowed the company to build up a supportive network in the industry.

" are clients but can also promote our software, so they can help us commercialize and develop. This is a group that is invested in seeing our company succeed."

The company is still the only firm listed on the site, demonstrating that Italian equity crowdfunding is still in its infancy. A yacht design startup, Cantiere Savona, has raised just over 10 percent of a 380,000-euro target on rival equity crowdfunding site starsup.it.

($1 = 0.7256 euros)

(Reporting by Naomi O'Leary; editing by Andrew Roche)

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