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Vialli pitches crowdfunding scheme


We recently reported on the success of Stevenage in raising funds for a new stand through a mini-bond, even though the cluib has a wealthy owner. This was done through Tifosy which claims to be 'the only fully authorised sports crowdfunding platform' after being approved by the Financial Conduct Authority,

Former star footballer Gianluca Vialli is the founder of the platform alongside chief executive Fausto Zanetton, a former investment banker with Goldman Sachs and Morgan Stanley.   This week Vialli has been pitching the concept to the Financial Times.

Vialli sees crowdfunding as a way of both solving financial challenges and improving engagement between clubs and fans.   It allows ordinary individuals to invest in sports clubs, which can opt to raise funds through selling equity shares, mini-bonds or seeking donations in return for specific rewards.

Tifosy says it has helped to raise roughly £1m for clubs since it was founded in 2015, including English teams such as Fulham and Coventry City, and a number of Italian Serie B clubs.    Tifosy takes a cut of roughly five to seven per cent from the sum raised in an investment campaign.  So far it is an unprofitable start up, but hopes to break even by 2019.

Mr Zanetton told the Pink 'Un, 'Football is a big pyramid.  You have 20-25 clubs that are big businesses, that could be part of a stock index.  The others are small and medium enterprises.  They do not always have access to instututional funding.  They need to be a lot more creative than relying on the owner to put money in.'

Vialli was interviewed on Radio 4 this morning.  He said that using the plaform was both an emotional matter and a question of rational returns.  He thought that fan involvement in financing would make clubs more accountable.  I am a little sceptical about this, but it will certainly give fans a sense of greater engagement.   Inevitably the interviewer had to pander to the Radio 4 audience by saying that 'many people think there is too much money in football.'

In the past some even quite small clubs sold shares to their fans.  I bought quite a considerable number at Charlton.  It then became apparent that we were going to move to a situation where it would become very difficult to trade the shares, so I sold mine at a loss.  Some Charlton fans saw this as a betrayal, seemingly not realising that the club had already received my admittedly modest investment.

Crowdfunding groups have come under fire in recent years, with critics arguing that they target unwitting investors who may be unaware of the risks involved in investing in start ups that have a high chance of failing.  Peer to peer lending, another innovative way of raising money, has also attracted increasing media criticism.

I am involved in both forms of funding and I am pleased both with the returns I have received and the satisfaction of helping innovative, start up companies, not all of them high tech.  For example, I have invested in an artisan cheese maker in Northern Ireland.   I think that there is real scope for this type of fuding to help smaller clubs.