Entering the stock market represents an ambitious goal for a company: access to significant capital, the chance to strengthen credibility in the market and increase visibility to investors and partners. But listing is neither an obligatory nor always convenient step: it requires corporate maturity, financial strength and a clear growth strategy.

In Italy, the segment of the Italian stock exchange Euronext Growth Milan has made the listing for SMEs and late-stage startups, with less stringent requirements than traditional regulated markets. However, costs, transparency requirements, and managing a broader investor base can be challenging for still-young entities.

In this article we will analyze What opportunities a stock market listing offers a startup company and we will understand when it makes sense to consider it as an option within the path of a young company. We will also offer a brief summary of the steps to be followed to list on the stock exchange and discover an alternative opportunity: the listing through crowdfunding.

Where startups can list in Italy

In Italy, the main stock market a startup can look to is. Euronext Growth Milan (EGM).

Euronext Growth Milan (EGM) is the market dedicated to dynamic and innovative SMEs, often used by scaleups and startups in the expansion stage. It offers more streamlined admission requirements than the regulated market and does not require the publication of a Consob-approved prospectus if you are not making a public offering of shares. Alternatively, it is sufficient to prepare a Admission Document, an information document prepared with the support of theEuronext Growth Advisor (a key advisor who supports the company both during the market admission phase and throughout its stay as a listed company). 

Borsa Italiana thought this specialized segment recognizing the Specificities and needs of smaller companies with high growth potential. By creating a tailored environment that significantly lowers the barrier to entry for startups compared to mainstream markets, it has made listing a more feasible and less intimidating option. 

From EGM, however, it is possible to make the transition to the standard regulated market (Euronext Milan) once adequate size has matured. Recent European regulatory changes, with the Listing Act, have introduced simplified procedures for these steps, so as to make it easier for growing companies to go through a more structured listing process.

Within EGM, there is also a Professional Segment specially designed for companies that want a more gradual entry into the market. This segment is particularly suitable for start-ups and scale-ups that have been commercializing products or services for less than a year and have yet to structure strategic functions and processes critical to their business model. 

The Professional Segment enables the following. "just listing" operations, ideal for companies that do not have an immediate need to raise capital, but aim to increase their visibility with investors or strategically position themselves to await more favorable market conditions before proceeding with an equity offering. Trading in this segment is accessible only to professional investors, and a Specialist is not required. 

EGM's Professional Segment can be considered a "sandbox" for listing. Companies can test the ground of public scrutiny, build relationships with investors, and adapt their internal structures to the needs of a listed company without the full pressure of an IPO. 

This phased approach significantly reduces the risk of the listing process for fledgling companies, allowing them to mature in a public environment. It provides a Structured path for startups to gain market visibility and build investor confidence before committing to a full capital raising, potentially increasing the success rate of subsequent IPOs.

Requirements for admission to Euronext Growth Advisor 

For a Startup considering IPO, it is crucial to understand what the requirements are for different markets. The requirements for admission on Euronext Growth Milan are designed to be less onerous than on the main market, while maintaining an appropriate level of transparency and governance.

• Euronext Growth Advisor (EGA): mandatory figure who accompanies the company through the admission process and ensures the accuracy of the information.
  
• Admission Document: prospectus replacement disclosure document, with focus on business model, financial data, governance, and risks. Among the documents, there must be at least one audited financial statement.
  
• Governance and procedures: requirement to have adequate internal control systems and procedures, even if simplified compared to the regulated market. A Board of Directors (BoD) with at least one independent director is required for companies listing through IPOs. In contrast, there is no formal requirement for an Audit and Risk Committee.
  
• Language and communication: information should be disseminated to the market in Italian or English.
  
• Free float minimum: a share of the capital is required to be spread across the market to ensure the liquidity of the stock, specifically a minimum of 10% of the share capital is required as free float (companies included in the Professional Segment have two years to reach this level of free float).
  
• Specialist: an intermediary responsible for supporting the liquidity of the security once it is admitted to trading.
• Transparency and reporting: companies listed on EGM must comply with the disclosure requirements of the Euronext Growth Milan Regulation and the Market Abuse Regulation (MAR). 

One important aspect concerns the public offerings of shares: Today in Italy there is an exemption from prospectus publication up to 8 million euros raised. This may make EGMs particularly attractive to startups aiming for smaller and faster raising.

The offering is primarily aimed at institutional investors, but retail investors are also allowed to participate for offerings of less than 8 million euros.

^{Costs, timing and incentives}

La stock exchange listing imposes significant costs and timelines. For a startup, carefully evaluating these burdens is essential to understand whether the operation is sustainable and in line with growth objectives.

Costs

The main items include:

• Advisors' fees (Euronext Growth Advisors or sponsors, law firms, auditors);

• communication and investor relations activities, which are crucial for building trust in the market;

• The admission and retention fees required by the chosen stock market.

Total listing costs average between 200,000 and 500,000 euros, including fees for Euronext Growth Advisor, legal advisors, auditors, and communication activities.

Added to these initial expenses are the annual costs of maintaining the listing (listing fees, disclosure requirements and investor relations).

Times

The process can take anywhere from six months to more than a year, depending on the complexity of the transaction, the company's readiness in terms of governance and reporting, and the speed with which the required reviews are completed.

Incentives

To support SMEs and startups taking this path, there are measures in Italy such as the IPO bonuses, a tax credit that covers part of the consulting fees incurred for the listing. This tool is a concrete aid to reduce the economic impact of the transaction and incentivize access to the capital market.

^{When does it make sense for a startup to list on the stock exchange}

Not all startups are ready or suitable to support a listing path. The stock market becomes an opportunity when the company has reached a growth stage where traditional private capital (venture capital, business angel, equity crowdfunding rounds) is no longer sufficient to support expansion.

Situations in which listing may make sense are:

• International expansion: capital raising is used to finance entry into new markets or the development of a business network abroad.
  
• Consolidation of governance: the startup already has control procedures, audited financial statements, and a management structure capable of addressing transparency obligations.
  
• Employer branding and reputation: the listing strengthens the company's image, making it more attractive to talent, partners and institutional investors.
  
• Extraordinary transactions: having listed shares allows them to be used as "currency" for strategic acquisitions and partnerships.

Although a startup may not have the financial maturity and soundness of an SME or large enterprise, which are the ideal basis for listing on the stock exchange, it can take other criteria to determine whether the time is right:

• Clarity of growth strategy
• Competitive positioning in the relevant industry and sound management structure
• Revenues and margins up
• Robust financial structure
• Favorable market in general and For the industry in which the company operates.

In other words, the stock exchange becomes a useful tool not only for raising capital, but also for growing as a company, attracting new stakeholders and consolidating one's competitive positioning, because it makes the company more attractive to investors and gives access to:

• Increased visibility, credibility and corporate prestige
• Easy capital raising
• Talent attraction and retention (e.g., stock options)
• Liquidity of securities 
• Continuous market assessment and transparency

In addition, the stock exchange acts as a Mechanism of discipline and improved governance. Ongoing market assessment and the requirement for transparency and regular reporting impose a significant level of discipline on the company. This external scrutiny forces management to be more accountable, adhere to best governance practices, and consistently deliver results. This is a subtle but powerful benefit, as it can lead to internal operational efficiencies and a stronger and more resilient corporate structure. 

In addition to capital, listing, therefore, acts as a catalyst for internal transformation, Pushing startups toward greater maturity and professionalism, critical elements for long-term sustainability and competitiveness. 

^{When it doesn't pay (yet) to list for a startup}

While listing can be a growth accelerator, in many cases it can prove premature or even counterproductive.

Here are some situations in which it is best to postpone:

• Unstable or too small revenues: if the business model does not yet generate consistent and predictable cash flows, the market will tend to assess the company as too risky.
  
• Absence of internal controls and procedures: without a reliable financial reporting system, the management of transparency obligations risks becoming unmanageable.
  
• High burn rate: a startup that consumes more capital than it can raise, without a clear break-even trajectory, is unlikely to convince public investors.
  
• Recurring costs and compliance charges: life as a listed company involves non-negligible annual expenses for financial communication, advisors, and governance.
  
• Liquidity of the stock: with too limited a free float, stocks are likely to have few trades and thus be unattractive.
  

In such cases, it may be preferable to continue financing growth through private rounds of venture capital, business angel, minibond or equity crowdfunding, deferring listing to a more mature stage.

It must also be considered that IPO leads to a critical trade-off: although it provides access to significant capital, it entails a Cost in terms of reduced range and increased market pressure in the short term. For a startup, agility and a long-term vision are often critical. The need to meet quarterly results and manage investor relations can divert resources and strategic focus away from core innovation and long-term value creation. 

^{How to do it: the step-by-step operational pathway}

La stock exchange listing is a long and complex path, imposing bureaucratic paperwork, but also elements of strategy, and presenting a margin of uncertainty. For a startup, but also for an established company, it is important to have a clear roadmap and specialized advisory support figures.

Here are the main steps.

1. IPO readiness: preliminary analysis to assess whether the company is ready, from corporate structure to financial statements, from governance to control procedures.
   
2. Team of consultants: choice of key partners, Euronext Growth Advisor or sponsor, law firm, auditor, market specialist, and financial communication consultants.
   
3. Equity story - definition of the narrative that will be presented to investors: business model, competitive advantage, growth KPIs, use of funds raised.
   
4. Due diligence and documentation: preparation of theAdmission Document (for EGM) or Consob-approved prospectus (for EXM), in addition to audits of financial statements and contracts.
   
5. Governance adjustments: revision of bylaws and implementation of internal procedures to meet post-listing obligations.
   
6. Structure of the operation: definition of placement mode (IPO with capital raising or direct listing), minimum free float and share price.
7. Early-look meetings: individual meetings with selected target investors to gauge initial market interest and possibly adjust the IPO project or, if feedback is not favorable, to withdraw from the process without significant financial commitments.
8. Pre-Deal Investor Education (PDIE): research analysts distribute pre-deal reports to key institutional investors. During this phase, feedback is gathered from investors to further refine the pricing and presentation ahead of the roadshow.
9. Roadshow: an intensive series of meetings with institutional investors and journalists. The main goal is to generate demand for the shares and directly communicate the company's vision and strategy.
10. Bookbuilding: Bookrunner opens the order book collecting requests with quantity e price (or within a price range).
11. Stock price setting: the final share price is determined based on the feedback gathered from investors during the previous stages. 
12. Placement and admission: The process of placing shares on the market. Once the placement is successfully completed, the company is officially listed and its shares begin trading.
    
13. Ordinary management - Ongoing management of disclosure requirements, financial calendar and market relations.

Each phase requires coordination and often progresses in parallel, with constant support from advisors and consultants.

^{Crowdfunding listing: from equity crowdfunding to listing}

An alternative route for Italian startups is the crowdfunding listing, a model that combines equity crowdfunding and IPO.

In practice, the company launches a campaign of equity crowdfunding, raising capital from a widespread investor base while building a shareholder base already validated by the market. Then, with the support of a listing sponsor, the placed shares are admitted to trading on a market such as Euronext Growth Milan. 

Unlike traditional IPOs, where capital raising and listing are merged into one complex operation, in crowdfunding listing these phases are separated. This allows the company to build a larger and more diversified shareholder base through crowdfunding more quickly and economically. 

The main advantages are:

• Price and project validation: crowdfunding campaign functions as a test of the market, allowing it to define a value recognized by investors.
  
• Reduced quotation time: already having a widespread membership base and prepared documentation shortens the steps to listing because it allows you to cut the roadshow.
• Clear liquidity strategy: for investors, crowdlisting offers a clear liquidity strategy as they purchase securities that will be tradable over a short-term horizon.
• Price transparency: the price of securities is clear, public, and does not change from the equity crowdfunding campaign to the listing stage, providing greater certainty for investors.
• Access to a broad investor base: equity crowdfunding enables companies to reach a wide audience of investors, including small retail investors.
• Integrated communication: like all equity crowdfunding campaigns, the crowdfunding campaign aimed at listing becomes both a capital raising and marketing operation, increasing the visibility of the company.
  

Italian examples are not lacking. CleanBnB, which specializes in property management for short-term rentals, has landed on Euronext Growth Milan after raising capital through an equity crowdfunding campaign. CrowdFundMe, a Consob-authorized portal, also chose the same path, becoming the first equity crowdfunding platform to list on the stock exchange.

Crowdfunding listing does not replace the traditional IPO, but it can be a Fast track for startups with a solid community and a clear growth strategy^.

^La stock exchange listing, therefore, is a possible goal not only for mature companies, but also for startups, yet it is not a choice to be approached lightly. It represents a step of great visibility and prestige, but at the same time it imposes costs, rules and responsibilities that not all companies are ready to bear.

For a startup, deciding to go public makes sense when the business model is validated, the financials are under control, and growth goals require capital and visibility that are difficult to achieve with alternative instruments. In other cases, it is more prudent to continue with private rounds or resort to flexible tools such as equity crowdfunding.

Bottom line, Quoting is never an end in itself, but a tool. The starting point must always be the company's growth strategy: only when goals and requirements meet can the stock exchange become the decisive lever to scale the market.