Results from the Kauffman Firm Survey (KFS) Baseline and First Follow-up Surveys

Although entrepreneurial activity is an important part of a capitalist economy, only small amounts of data are available about U.S. businesses in their first years of operation. As part of an effort to gather more data on new businesses in the United States, the Ewing Marion Kauffman Foundation sponsored the Kauffman Firm Survey (KFS), a panel study of new businesses founded in 2004 and tracked over their early years of operation. The Kauffman Foundation contracted with Mathematica Policy Research, Inc., (MPR) to conduct the KFS, which collects data about the nature of new business formation activity; characteristics of the strategy, offerings, and employment patterns of new businesses; the nature of the financial and organizational arrangements of these businesses; and the characteristics of their founders.

The data from both the Baseline and First Follow-Up Surveys provide an understanding of how businesses are organized and operate in their first two years of existence (2004 and 2005), and provide some indicators of survival and growth. Other measures describe the characteristics of the panel, such as the extent to which these businesses are involved in intellectual property innovation (patents, copyrights, or trademarks). A series of twenty-seven tables in this report gives a broad overview of the business characteristics, owner demographics, and financing patterns for the base year, as well as business dynamics over the 2004-2005 period. The KFS dataset provides researchers a unique opportunity to study a panel of new businesses from start-up to sustainability, with longitudinal data centering on topics such as how businesses are financed; the products, services, and innovations these businesses possess and develop in their early years of existence; and the characteristics of those who own and operate them.

The KFS’ main objective is to address the informational gaps related to the study of entrepreneurship. Understanding new business development and sustainability is essential for creating policies that encourage new business development and innovation. These initial findings provide numerous insights into the earliest years of a firm’s existence.