Andrea Gritti is co-leader of the Private Equity business at Italian legal firm Portolano Cavallo. He talks to Pietro Ferrari, Managing Director Upliift Italy, about the need for local knowledge and an understanding of the software industry on the part of investors when company founders and owners are looking for investment to fund their growth for long-term success.

Spotlight on

• Portolano Cavallo’s length of tenure in the Italian market and its digital/tech sector focus gives us insight into how founders and owners think and operate here.
• Upliift’s permanent equity approach is a long-term model, as opposed to a short-term invest-to-sell model.
• If Italian founders knew more about the opportunities in other countries, they could leverage their growth and offer their products to a wider market.
• Having someone in the world of capital investment who speaks a founder’s language is crucial when they are looking to fund their growth.
• When an entrepreneur decides to move to a new phase of growth, selecting investment beyond purely self-funding and banking debt demands people aligned with the values of the company.
• We have seen numerous Upliift acquisitions in Italy in the past 12 months as both founders and Upliift recognise the great investment fit between them.

In conversation…

What’s your legal background?

I am an Italian lawyer specialised in private equity. I started out in one of the major independent Italian law firms and now have almost 20-years’ experience in the legal profession. I joined full-service law firm Portolano Cavallo in Milan in 2023 They have an industry focus on digital technology and media, as well as the life sciences and healthcare sectors, and I focus on acquisitions by sponsors within these areas.

What challenges do Italian founders face when growing their businesses?

The economic environment in Italy is built largely on small to medium enterprises (SMEs), which are mostly family owned. In this fragmented market, while there are many SMEs with great products and software, they often have only limited international contacts and view of what’s happening in other markets. The global nature of business nowadays means that this is a problem in many instances because what happens in the US and the UK – and, of course, in the EU – influences what happens on the Italian market. Knowledge about trends and opportunities in other countries, would enable founders to leverage growth and offer their products to a wider market, with a bigger target audience.

Why might Upliift’s permanent equity model be attractive to Italian founders?

It’s typical for Italian family-owned businesses to lack knowledge of and access to international private equity funds. So, having someone in the world of capital investment who speaks their language and has a deep knowledge of the software industry is crucial when they are looking to fund their growth, while also protecting their company’s family legacy. There is a cultural aspect in terms of understanding the Italian family-led business landscape where the founders have a deep personal connection with their company and its business, which is part of the culture that allowed the company to grow over the years.

So, when an entrepreneur decides to move to a new phase of growth, selecting investment beyond purely self-funding and banking debt demands people aligned with the values of the company and committed to a long-term investment. These entrepreneurs are not simply looking for a focus on cash, but also on the competencies the investor can bring on board and people with a view on their specific industry, such as the software sector. Since Upliift is a permanent capital investor in the software sector and its investment team has a deep knowledge of the technical and business aspects of the sector, I believe they are a good fit with the Italian market.

How did you start working with Upliift and its Italian companies?

I was referred by an investment professional with whom I’d previously worked because of Portolano Cavallo’s areas of expertise, especially in digital and technology. The Italian software sector has peculiarities from a legal perspective in the areas of IP, data protection and cybersecurity. For example, these could be to do with registration, media rights, employee inventions, and how data is managed. All of this demands a high level of attention from a legal standpoint. In addition, many family-owned businesses don’t have that legal know-how or understanding of compliance needs when looking to attract investors. While most of these family companies are in good order with regards the business itself, they need to take an extra step to increase the company’s level of professionalism in the eyes of investors. This will also ensure they are ready to compete on the global markets. And, for that, they need support.

How does Portolano Cavallo make the investor journey easy?

Our length of tenure in the Italian market gives us insight into how founders and owners think and operate. We know that they often need support interpreting the very specific language and terminology of the investor community. We understand what they need to do to professionalise their business and make it more institutionalised as per an investor’s demands. With regards to Upliift, there is co-parity between them and the business owners and, as a legal adviser, Portolano Cavallo is there to make things work between both parties. We can explain the legal implications in clear business terms so that founders understand the potential ramifications of their decisions for the business, the investors, and all other stakeholders.

Can you expand on how you work with Upliift – and what Upliift brings to the Italian market?

We are totally aligned with Upliift’s approach to potential business partners, which is key during the negotiation of the agreements required to complete the deal. It’s a wholly collaborative approach that sees Portolano Cavallo and Upliift working with business owners on their investment and growth strategies. Upliift’s permanent equity approach brings a long-term model, as opposed to a short-term invest-to-sell model. This will typically see a founder still working with the company to keep their knowledge and experience on the table even after Upliift has acquired it. That’s important in the Italian software sector.

Upliift’s permanent capital investment model is combined with a strong knowledge of the local market drivers here in Italy, with a particular strength in the European software industry. Having come from the software industry themselves, Upliift’s leadership understands what makes a software company work.

Can you indicate how many Upliift deals you have helped bring to fruition in the Italian market?

Naturally, I can’t talk about specific deals, but I am able to say that we have completed multiple acquisitions in the past year. In fact, Italy has seen the most Upliift acquisitions by country in the past 12 months reflecting that founders and, of course, Upliift recognise the great investment fit between them.