On May 16, 2016, the U.S. Securities and Exchange Commission’s
new investment crowdfunding rule, Regulation Crowdfunding
(Regulation CF), went into effect, marking an important step in
the federal government embracing financial technology (FinTech)
to increase access to capital for small businesses. Regulation Crowdfunding enabled small businesses to raise up to $1,000,000 annually by offering and selling securities through internet-based crowdfunding campaigns. This issue brief analyzes all crowdfunding filings made pursuant to Regulation CF during the first year of activity (May 16, 2016 – May 16, 2017). It highlights key attributes of the firms that have attempted to raise capital through this financing method, including firm location, legal structure, age, employment, and gender. This analysis also
describes trends among the online intermediaries responsible for hosting the campaigns as well as transactional characteristics, such as the type of securities offered and the amount of capital sought and raised. The paper concludes with a discussion of policy implications for small businesses seeking capital through
crowdfunding and other innovative financing methods.
Resource Category: Access to Capital
Crowdfunding for Women Entrepreneurs: Kiva
This research seeks to provide a deeper understanding of the dynamics of the successful crowdfunding on Kiva, a non-profit lending crowdfunding platform based in the U.S. It investigates whether a larger social network will increase the likelihood of women’s success on Kiva in comparison to their male counterparts. To this end, using a novel dataset received from Kiva for the period between 2011 and 2017, a series of multiple logistic regression analysis was conducted. These analyses were coupled by iv comprehensive descriptive analysis to better distill and describe the gender dynamics, as well as the relationship between women’s success and crowdfunding variables on Kiva.
Crowdfunding for Women Entrepreneurs: Kickstarter
The study attempts to investigate, from a gender perspective, the role of a project creator’s online social network in contributing to the success of fundraising campaigns in reward-based crowdfunding. It also tries to provide a deeper insight into successful crowdfunding dynamics. Using a novel dataset received from Kickstarter (i.e. the largest reward crowdfunding platform in the U.S.) for the period between 2009 (its inception) and 2017, a series of logistic and linear regression analyses were conducted. These analyses were combined with comprehensive descriptive analysis and extensive visuals to better illustrate and explain the gender dynamics, as well as the relationship between women’s success and crowdfunding variables on Kickstarter.
Access to Capital for Women Entrepreneurs
The goal of this report is to support the council in establishing a knowledge base about
women business owners’, leaders’, and entrepreneurs’ access to capital. This report represents
a high-level situational analysis, exploring major issues and developments affecting women
entrepreneurs to inform the NWBC’s framework for defining research priorities and engagement
efforts.
Financing Patterns by Race and Ethnicity
The SBA issued “Financing Patterns and Credit Market Experiences: A Comparison by Race and Ethnicity for U.S. Employer Firms“. Hispanic and Black Americans are underrepresented in business ownership compared with their shares of the general population. Asians (73 percent) Hispanics (72 percent) and Blacks or African Americans (70 percent) rely on owner’s personal or family savings as a source of startup capital, while 65 percent of Whites relying on this source.
2016 Rural Firms Credit Survey
The physical location of rural small employer firms in less densely populated areas presents an economic, demographic and cultural context that is distinct from the one in which urban small employer firms operate. This Report on Rural Employer Firms compares the business and financing conditions of small employer firms located in rural areas to those located in urban areas. This report is part of a series of reports that use data from the 2016 Small Business Credit Survey (SBCS), a national data-collection effort by the twelve Federal Reserve Banks. All differences between urban and rural small employer firms highlighted in this report are statistically significant based on credibility intervals.
CDFIs & Impact Investing
Many urban and rural communities throughout the country lack the capital and resources necessary to create opportunity and promote growth. The community development financial institution (“CDFI”) industry has focused on filling this gap by investing extensively in these communities to improve their economies, physical environment and the financial well-being of residents. In many ways, CDFIs have been pioneers of promoting progress by investing for social impact.
2016 Microbusinesses Credit Survey
This report is one in a series based on the findings of the 2016 Small Business Credit Survey (SBCS), a national collaboration of the Community Development Offices of the 12 Federal Reserve Banks. As a supplement to the Report on Employer Firms released in April 2017, this Report on Microbusinesses details findings on the financing experiences and outcomes of the smallest firms in the United States, including the self-employed.
2016 Women-Owned Firms Credit Survey
This report uses a unique dataset to examine the experiences of women-owned small employer firms, especially as compared to their men-owned peers. Small employer firms have traditionally played an important role in U.S. job creation,8 and women-owned firms are an emerging share of the sector. Understanding the opportunities and challenges facing this growing segment of women-owned employers can provide insight into future economic contributions of the sector overall.
2016 Minority-Owned Firms Credit Survey
This report is the third in a series of reports based on the 2016 Small Business Credit Survey (SBCS), a national collaboration of the Community Development Offices of the 12 Federal Reserve Banks. As a key financial regulator and economic policymaker, the Federal Reserve System plays an important role in ensuring fair access to credit and promoting economic growth for the well-being of all Americans. Small businesses are an important component of economic success and strong communities; they are responsible for 48% of private sector employees nationwide, are important drivers of local and regional economic growth, and are an important source of household wealth. A healthy small business environment depends on an array of factors, not least of which is the ability to access funds for starting up, scaling up, or maintaining operations. However, as a growing number of studies document, access to funds—whether debt, equity, or personal resources— can vary across race and ethnicity even when business owners are similar in other respects such as business performance and credit risk.