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

OECD OCDE1

Kauffman Firm SurveyKauffman Firm Survey

Tim DavisEntrepreneurship Indicators Project

OECD

ISTAT-Eurostat-OECD Seminar on Entrepreneurship Indicators

Rome, December 6 and 7, 2006

Tim Davis, Statistics Directorate, OECD

Background Background The Kauffman FoundationThe Kauffman Foundation

Large American FoundationLarge American Foundation Based in Kansas City, USABased in Kansas City, USA Established by Ewing Kauffman: Successful entrepreneurEstablished by Ewing Kauffman: Successful entrepreneur Missions: Missions: - Advancing Entrepreneurship- Advancing Entrepreneurship

- Improving education of children & youth- Improving education of children & youth Strong supporter of entrepreneurship research and Strong supporter of entrepreneurship research and datadata Headed by Carl SchrammHeaded by Carl Schramm Recent new entrepreneurship book by Schramm:Recent new entrepreneurship book by Schramm:

““The Entrepreneurial Imperative: How America’s Economic The Entrepreneurial Imperative: How America’s Economic Miracle Will Reshape the World (and change your life)”Miracle Will Reshape the World (and change your life)”

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The Kauffman Firm SurveyThe Kauffman Firm Survey

Purposes of the SurveyPurposes of the Survey Understand challenges of owning/operating a new businessUnderstand challenges of owning/operating a new business Understand the factors of success for businessesUnderstand the factors of success for businesses Focus on financial development during first four yearsFocus on financial development during first four years Characteristics of business and owners as well as detailed Characteristics of business and owners as well as detailed

information on financing of start-up and operations information on financing of start-up and operations Inform policy decisions and academic researchInform policy decisions and academic research Create a publicly-available data setCreate a publicly-available data set

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MethodologyMethodology

Longitudinal surveyLongitudinal survey

Target populationTarget population NewNew businesses started in 2004; still operating businesses started in 2004; still operating Not a Branch, subsidiary or inheritedNot a Branch, subsidiary or inherited Excludes not-for-profits Excludes not-for-profits

MustMust locate original entrepreneur locate original entrepreneur Interview terminates if original entrepreneur not availableInterview terminates if original entrepreneur not available

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Sample :Sample :

- 5,000 companies; From Dun and Bradstreet list- 5,000 companies; From Dun and Bradstreet list

- Over sampled “High Tech”(3,000 firms)- Over sampled “High Tech”(3,000 firms) Numerous screening questions to ensure eligibility Numerous screening questions to ensure eligibility Questions Re: taxes, administrative and legal statusQuestions Re: taxes, administrative and legal status Total of ~90 QuestionsTotal of ~90 Questions

Includes interviewer flow questionsIncludes interviewer flow questions KFS poses questions for EACH ownerKFS poses questions for EACH owner

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KFS: Questionnaire ModulesKFS: Questionnaire Modules

Introduction/Identify “original entrepreneur”: 10QEligibility Screening: 13QBusiness Characteristics: 8QStrategy and Innovation: 7QBusiness Organisation and HR Benefits 3QBusiness Finances 31QWork Behaviours and Demographics of Owners 11QTracing or Follow-up Questions 7QInformation Obtained by Observations 1Q

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Comparison Categories:Comparison Categories:KFS vs. FoBSKFS vs. FoBS

Methodology

Entrepreneur’s Profile

Business Characteristics/Environment

Business Strategy and Innovation

Financials

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FeaturesFeatures KFS KFS FoBS FoBS

Number of Number of questions questions

~90 questions ~90 questions ~32 questions~32 questions

Collection of Collection of InformationInformation

CATI or Web surveyCATI or Web survey Incentive: $ 50 Incentive: $ 50

Paper Survey (?)Paper Survey (?)

CoverageCoverage USAUSA 13 EU members + 2 13 EU members + 2 acceding countriesacceding countries

Sample sizeSample size 5000 5000

(3000 high tech)(3000 high tech)

Varies by countryVaries by country

Survey FrameSurvey Frame Dun and BradstreetDun and Bradstreet National Business National Business RegistersRegisters

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Entrepreneur’s ProfileEntrepreneur’s Profile

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KFS KFS FoBS FoBS

Salary or Position Salary or Position Original entrepreneur? Original entrepreneur? Paid employee? Avg Paid employee? Avg hours workedhours worked

Original entrepreneur? Original entrepreneur? Other paid job?Other paid job?

Age, Sex, Age, Sex, Citizenship, Citizenship,

Yes + Race, Born in the Yes + Race, Born in the USA ; USA ;

Citizen = USA vs. other Citizen = USA vs. other

Yes + Country of Yes + Country of residenceresidence

MotivationMotivation NoNo YesYes

Previous experiencePrevious experience Yes (3 questions)Yes (3 questions) Yes (2 questions)Yes (2 questions)

Previous situationPrevious situation NoNo YesYes

SupportSupport NoNo Training; Sources of Training; Sources of adviceadvice

EducationEducation Yes Yes YesYes


Business Business Characteristics/EnvironmentCharacteristics/Environment

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KFS KFS FoBS FoBS

Number employeesNumber employees In 2004 In 2004 + full/part time + full/part time

At start-up and in 2004 At start-up and in 2004 + paid/unpaid+ paid/unpaid

Number owners Number owners +active owners+active owners

YesYes How is firm managed todayHow is firm managed today

CustomersCustomers Sales by client typeSales by client type No of customersNo of customers

Competition Competition Licensing in/outLicensing in/out Relations within industryRelations within industry

Difficulties?Difficulties? No No -Difficulties on start-up -Difficulties on start-up -Impediments to sales and -Impediments to sales and developmentdevelopment


Business Business Characteristics/EnvironmentCharacteristics/Environment

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KFS KFS FoBS FoBS

Type of start-upType of start-up YesYes YesYes

Product vs. serviceProduct vs. service Yes Yes NoNo

Type of business Type of business locationlocation

YesYes NoNo

Extent of MarketExtent of Market NoNo YesYes

Employees by functionEmployees by function 7 Function groups7 Function groups NoNo

Employee BenefitsEmployee Benefits YesYes NoNo


Business Strategy and Business Strategy and Innovation Innovation

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KFS KFS FoBS FoBS

Product vs. Product vs. serviceservice

Yes Yes NoNo

InnovationInnovation Competitive advantages, Competitive advantages, Patents, Licensing, etcPatents, Licensing, etc

InnovationInnovation

Future plansFuture plans Will business move?Will business move? Yes (3)Yes (3)

Web siteWeb site YesYes NoNo


FinancialsFinancialsKFS: 26 Questions KFS: 26 Questions FoBS: 3 QuestionsFoBS: 3 Questions

Source of fundingSource of funding Angel, Loans, Venture Angel, Loans, Venture Capital, Owners Capital, Owners + amounts, proportions+ amounts, proportions

Angel, Loans, Angel, Loans, Venture Capital, Venture Capital, OwnersOwners

Financial StructureFinancial Structure Equity, Debt Options, Equity, Debt Options, Trade Financing Trade Financing

NoNo

Revenues / Revenues / ExpensesExpenses

Detailed amountsDetailed amountsTotal profit/lossTotal profit/lossWages, salaries, benefitsWages, salaries, benefitsMachinery, equipmentMachinery, equipmentR&DR&D

Turnover Turnover Judge profitabilityJudge profitability

Assets / LiabilitiesAssets / Liabilities Types and valuesTypes and values NoNo

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

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Survey ResultsSurvey Results KFS results, and analytical overview, expected in KFS results, and analytical overview, expected in

February 2007February 2007 Release through Kauffman Web Site and other Release through Kauffman Web Site and other

channelschannels

Eurostat has published aggregated data on its Eurostat has published aggregated data on its Web SiteWeb Site

““Statistics in Focus” Bulletin also published Statistics in Focus” Bulletin also published

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Documents

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