Business model in IPO prospectuses: insights from Italian Innovation Companies


How do companies to be listed deal with the voluntary disclosure of their business model? Is it true that firms with greater intellectual capital resources and technological innovation endowments are less prone to full disclosure? This paper aims to examine the choices of voluntary disclosure of the business model made by three Italian manufacturing companies in initial public offering prospectuses. The objective is to explore whether any differences exist and may be related to the type of innovation underlying the firms’ business model. A series of interviews with the top management allows to deeply understand the business model of each company. A content analysis allows to measure the level of disclosure and identify the strategic concepts of the business model and their relevance. The study provides evidence that companies with a business model based on technology-push and design-driven innovation have a lower propensity to the full disclosure of their intangible resources, particularly of those based on knowledge as some could be also invisible. The paper contributes to the ongoing debate on the role of business and financial reporting.

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  1. 1.

    The prospectus must be published before the shares issuance and should include a description of the economics and financial position to the most recent date, as well as the characteristics of the public offering and other essential information about the issuing company (Art. 94, comma 2, d.lgs.58/1998).

  2. 2.

    For example, a manager could announce that a new customer has been acquired but exercise discretion over whether to disclose the specific terms of the contract such as the negotiated price or the minimum contracted volume.

  3. 3.

    This is why using a case study for anything more than exploratory purposes could be risky (Bromley 1986; Flyvbjerg 2006). Critics also claim that a case study does not accurately measure independent and dependent variables (Stoecker 1991).

  4. 4.

    Either manually or by using text analysis software.

  5. 5.

    For example, the words “spoken” and “speaking” would both appear under the lemma “speak”.

  6. 6.

    We opted for a cluster analysis given our primary goal to isolate the concepts exclusively referred to the construct under investigation: the business model.

  7. 7.

    For instance, the cluster “corporate governance” for Eurotech is populated by the following concepts: board, ownership, director, Barazza, structure, committee, executive, Siagri…etc.

  8. 8.

    We considered only the concepts that show an association coefficient greater than 20 %.

  9. 9.

    These represent part of the text corresponding to one or more sentences in which the presence of a concept is detected. Their analysis allows us to avoid, for example, confusing nouns (i.e. “prodotto”/“product”) with verb forms (i.e. “prodotto”/“produced”).

  10. 10.

    The associated concepts are represented in each table following a decreasing order of the value of the association coefficient. We use bold to highlight those concepts considered as highly frequent (i.e. showing a frequency value at least equal to 35). We then use capital letters for those concepts previously identified as “common and frequent” and “frequent and exclusive”.

  11. 11.

    The 30 interviews are divided as follows: 5 with the Chairman and MD of Eurotech, 3 with the CFO and 3 with the Investor Relator manager; 5 with the Chairman and MD of Nice and 3 with the CFO; 5 with the Chairman of Zignago Vetro, 3 with the MD and 3 with the CFO and Investor Relator manager.

  12. 12.

    The Italian IPO prospectus consists of two sections preceded by the following paragraphs: “Definitions and Glossary”, “Company risk factors” and “Summary Note”. For our purpose, the analysis is limited to the first section, particularly the first nineteen chapters that show a narrative structure.

  13. 13.

    Freq. E, N, Z indicate the occurences (i.e. how many times) with which a single lemma appears within the corpus.

  14. 14.

    The concepts are derived from the T-Lab cluster analysis for the grouping “business model”. The list do not sum up to the total number of concepts in the cluster as we applied the frequency and commonness criteria to discriminate them.

  15. 15.

    Note that the concept “Commercial” appears in two different columns as a result of its double attribution to two of the business model components: suppliers and customers. Indeed, depending on the company to be considered it may take different meaning. For instance, in the case of Nice the concept is mainly referred to the distribution activity and commercial presence of the company to reach the customers and thus creating value. In the case of Eurotech, the concept has a direct link to the relations with major industrial and commercial partners. Based on the same rationale, we also split the most associated terms into the appropriate columns.

  16. 16.

    Structural capital represents the skeleton of an organisation and has been described as what is left behind after employees have left the organisation. It is owned by an organization and comprises the infrastructure that supports human capital. Structural capital includes information systems, proprietary databases, laboratories, market intelligence and intellectual property such as brand and patents (Edvinsson and Malone 1997).


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Correspondence to Giulia Redigolo.



In-depth interview on business model

Mission and vision

  • What is the purpose for which your company exist?

  • Which are your assumptions about the dynamics of the external environment?

  • Which values characterized your vision?

  • Do you adopt a strategy focused towards productivity (efficiency gains by reducing direct and indirect costs) or growth (promote revenue growth with appropriate policies)?

  • What are your choices at the corporate level?

  • What is your business perspective in the medium-long term? What are your ambitions for the future?

Economic value

  • What about your current economic and financial performance?

  • How are your costs structured? Are them fixed or variable?

  • How do you set the prices?

  • How would you described your revenue model?


  • Who are your key suppliers?

  • What kind of relationship do you have with them? Do you have bargaining power?

  • Are you integrated with your key suppliers?

  • Which resources and core competencies do you acquired from them?

  • To what extent are your mission and goals aligned with those of your suppliers/partners?

  • What kind of competitive advantage the relationship with suppliers generate?

  • Do the supply channels allow you to gather the resources you need when required?


  • What kind of resources do you possess? (Tangible: financial, physical, or intangible: relational capital, reputational, structural, human…)

  • Do the resources used belong to your own or to external parties?

  • How well do they complement and support each other?

  • To what extent the core competencies allow you to offer benefits to the buyers?

  • How unique is your resource base? And how difficult is it for competitors to imitate it?


  • Which are the main processes that characterize your company? (Production, distribution…)

  • Does your industry include companies that enjoy significant cost advantages deriving from their experience in performing some activities?

  • Which are your most critical processes (the processes that create more value for customers and have a high degree of specialization)?


  • What kind of product do you offer? (commodity, good, service, experience…)

  • How do you characterize your value proposition? (Price, reliability, availability, performance, quality, technology, safety, image, style, customization…)

  • Is your product a standard one?

  • What architecture does your product have? And how is it designed?

  • What is the final destination of your product?

  • What is the role of each of your products in the range offer?

  • What is the level of financial feasibility of each of your products?

  • Which factors affect competition for substitute products?

  • How important are R&D activity and product innovation? And what is the role of technological progress within your industry?


  • What value or benefit do you distribute to customers?

  • What is your target market? Is it segmented? And which are the segmentation variables that you use?

  • What is the rate of growth of each market segment?

  • Do some buyers have bargaining power due to a high volume of purchase?

  • What kind of relationships do you establish with customers? (Price, benefit offered, confidence, know-how possessed…)

  • Which communication channels do you use?

  • Which distribution channels do you use? Do you have a strong network of distributors and dealers?

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Bagnoli, C., Redigolo, G. Business model in IPO prospectuses: insights from Italian Innovation Companies. J Manag Gov 20, 261–294 (2016).

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  • Voluntary disclosure
  • Business model
  • Initial public offering
  • Intangibles
  • Innovation