Kauffman Firm Survey Tim Davis Entrepreneurship Indicators Project

Kauffman Firm Survey Tim Davis Entrepreneurship Indicators Project OECD ISTAT-Eurostat-OECD Seminar on Entrepreneurship Indicators Rome, December 6 and 7, 2006 Tim Davis, Statistics Directorate, OECD 1

Background The Kauffman Foundation Ø Ø Ø Ø Large American Foundation Based in Kansas City, USA Established by Ewing Kauffman: Successful entrepreneur Missions: - Advancing Entrepreneurship - Improving education of children & youth Strong supporter of entrepreneurship research and data Headed by Carl Schramm Recent new entrepreneurship book by Schramm: “The Entrepreneurial Imperative: How America’s Economic Miracle Will Reshape the World (and change your life)” Tim Davis, Statistics Directorate, OECD

The Kauffman Firm Survey Purposes of the Survey Ø Understand challenges of owning/operating a new business Ø Understand the factors of success for businesses Ø Focus on financial development during first four years Ø Characteristics of business and owners as well as detailed information on financing of start-up and operations Ø Inform policy decisions and academic research Ø Create a publicly-available data set Tim Davis, Statistics Directorate, OECD

Methodology Ø Longitudinal survey Target population Ø New businesses started in 2004; still operating Ø Not a Branch, subsidiary or inherited Ø Excludes not-for-profits Ø Must locate original entrepreneur Ø Interview terminates if original entrepreneur not available Tim Davis, Statistics Directorate, OECD

Methodology Ø Sample : - 5, 000 companies; From Dun and Bradstreet list - Over sampled “High Tech”(3, 000 firms) Ø Numerous screening questions to ensure eligibility Ø Questions Re: taxes, administrative and legal status Ø Total of ~90 Questions Ø Ø Includes interviewer flow questions KFS poses questions for EACH owner Tim Davis, Statistics Directorate, OECD

KFS: Questionnaire Modules ØIntroduction/Identify “original entrepreneur”: ØEligibility Screening: ØBusiness Characteristics: ØStrategy and Innovation: ØBusiness Organisation and HR Benefits ØBusiness Finances ØWork Behaviours and Demographics of Owners ØTracing or Follow-up Questions ØInformation Obtained by Observations Tim Davis, Statistics Directorate, OECD 10 Q 13 Q 8 Q 7 Q 3 Q 31 Q 11 Q 7 Q 1 Q

Comparison Categories: KFS vs. Fo. BS ØMethodology ØEntrepreneur’s Profile ØBusiness Characteristics/Environment ØBusiness Strategy and Innovation ØFinancials Tim Davis, Statistics Directorate, OECD

Methodology Features KFS Fo. BS Number of questions Collection of Information ~90 questions ~32 questions n CATI or Web survey n Incentive: $ 50 n Coverage USA Sample size 5000 (3000 high tech) 13 EU members + 2 acceding countries Varies by country Survey Frame Dun and Bradstreet Tim Davis, Statistics Directorate, OECD Paper Survey (? ) National Business Registers

Entrepreneur’s Profile KFS Fo. BS Salary or Position Original entrepreneur? Paid employee? Avg hours worked Original entrepreneur? Other paid job? Age, Sex, Citizenship, Yes + Race, Born in the USA ; Citizen = USA vs. other Yes + Country of residence Motivation No Yes Previous experience Yes (3 questions) Yes (2 questions) Previous situation No Yes Support No Training; Sources of advice Education Yes Tim Davis, Statistics Directorate, OECD

Business Characteristics/Environment KFS Fo. BS Number employees In 2004 + full/part time At start-up and in 2004 paid/unpaid Number owners +active owners Yes How is firm managed today Customers Sales by client type No of customers Competition Licensing in/out Relations within industry Difficulties? No -Difficulties on start-up -Impediments to sales and development Tim Davis, Statistics Directorate, OECD +

Business Characteristics/Environment KFS Fo. BS Type of start-up Yes Product vs. service Yes No Type of business location Yes No Extent of Market No Yes Employees by function 7 Function groups No Employee Benefits No Yes Tim Davis, Statistics Directorate, OECD

Business Strategy and Innovation KFS Fo. BS Product vs. service Yes No Innovation Competitive advantages, Innovation Patents, Licensing, etc Future plans Will business move? Yes (3) Web site Yes No Tim Davis, Statistics Directorate, OECD

Financials KFS: 26 Questions Fo. BS: 3 Questions Source of funding Angel, Loans, Venture Capital, Owners + amounts, proportions Angel, Loans, Venture Capital, Owners Financial Structure Equity, Debt Options, Trade Financing No Revenues / Expenses n Detailed amounts n. Total profit/loss n. Wages, salaries, benefits n. Machinery, equipment n. R&D n Assets / Liabilities Types and values No Tim Davis, Statistics Directorate, OECD Turnover n Judge profitability

KFS Financials Ø Did owners money buy shares? How much? How many? Ø How much equity from each source? Ø Ownership share for each equity source? Ø Owners’ use of debt sources? Which sources? Ø Credit line? Credit card balance? How often? Amount? Ø Business use of debt sources? Same questions… Ø Amounts obtained by business from other debt sources Ø Did business purchase “on account”? (deferred payment) Ø How much was purchased on account? Tim Davis, Statistics Directorate, OECD

Survey Results Ø KFS results, and analytical overview, expected in February 2007 Ø Release through Kauffman Web Site and other channels Ø Eurostat has published aggregated data on its Web Site Ø “Statistics in Focus” Bulletin also published Tim Davis, Statistics Directorate, OECD