SME Financing in Canada, 2002 — Part III: SME Financing Data Initiative: History and Outlook

Topics of Specialized Studies and Research

The data collection schedule outlined above represents a preliminary plan that will require continued monitoring and re-evaluation as new research issues and priorities emerge and survey results are assessed. In particular, the content and timing of the specialized studies after 2001/2002 will depend largely on the analysis of earlier studies and the baseline survey data. Both the surveys of financial suppliers and those of SMEs across Canada will be used to flag areas of financing that require further exploration, but lack the baselines to provide in-depth analysis. The niche areas of financing that the partners have targeted thus far are described below.

Completed Studies

Practices and Patterns of Informal Investors
Updated profiles of typical informal investors were obtained using empirical data. This study collected data pertaining to the habits, perceptions, and opinions of investors on the investment climate in Canada. The methodology involved meeting with 11 focus groups of informal investors across Canada, and allowed for capture of regional differences.

Value Added by Informal Investors: Findings from a Preliminary Study
This was a report on the types of contributions, such as advice, contacts, and market and business intelligence, made by private investors, and also a documentation of business owners' perceptions of the value of these contributions. The aim of this study was to increase understanding of the role that private investors play in the growth of Canadian SMEs.

Issues Surrounding Venture Capital, Initial Public Offering (IPO) and Post-IPO Equity Financing for Canadian SMEs
This study provides an overview of the venture capital and IPO markets in Canada and the United States to inform the future research agenda in these areas. The study examines access, costs, sectoral and regional differences, supply versus demand, and cross-border flows.

SME Attitude Study
This study measures the level of satisfaction of SMEs in Canada with the quality of service received from financial service providers. It reports on the needs, concerns, perceptions, knowledge and awareness that SMEs have of the various financial instruments available to them.

Business-owner Characteristics and Effects on Access to Financing
This report provides a literature review of recent work examining the obstacles to small business financing attributed to business-owner characteristics, with particular emphasis on barriers attributed to gender, age, language profile, and whether the business owner is an Aboriginal or a member of a visible minority. Based on the findings of this research, a corresponding methodological report was developed, which informs our future research agenda on these issues.

Financing Gap Analysis Study
This study examined existing research to identify market failures in access to, and/or provision of, financing to Canadian SMEs. As part of the report, the study provides an analytical framework to analyse baseline survey data and determine where market failures may occur and how to effectively measure these gaps.

Ongoing Studies

Profiles of VC Investors
Updated profiles of typical venture capital investors will be developed using empirical data. This study will collect data pertaining to the habits, perceptions and backgrounds of venture capitalists in Canada.

Upcoming Surveys and Studies

Supplemental Demand Survey
In the years between the benchmark demand surveys, a brief supplemental survey will gather pertinent information to gauge access to financing by SMEs on an ongoing basis.

Pension Funds and their Investment in SMEs
Current investment practices of Canadian pension funds and those of American fund managers will be examined in detail in this study.

Availability of Micro-Credit Financing
This study will evaluate the issues surrounding micro-entrepreneurs seeking financing amounts of less than $25 000 and the supply of such financing.

Venture Capital International Comparisons
International comparisons of venture capital activity are often challenging, as different G-8 countries use different definitions for VC. This study will compare the data coming from these sources in an attempt to reconcile Canada's VC investment performance relative to its major competitors.

Knowledge-Based Industries and Innovation: Access to Financing
This research will identify the financing needs specific to SMEs in the KBI sector. Baseline data will contribute to a specific agenda for the study.

Access to Financing: Rural versus Urban
This study will examine the differences, if any, in access to financing by SMEs in rural and urban Canada, and the changing factors that impact on that access.

Electronic Financing
This study will identify emerging trends in electronic methods of financing – such as Internet credit applications and matchmaking services – and their usage by SMEs.

Seed and Research and Development Financing Needs
This survey will identify the financing needs specific to SMEs in the seed stage of development, and those enterprises with significant research and development requirements.

Price versus Risk of Capital
This report will examine options available to finance risky SME ventures as projects move up the risk curve, to determine if there are gaps in access to debt or equity financing.

Initial Public Offerings: Why Issue in Canada and/or the United States?
This study will report on the statements of benefits and drawbacks given by companies that have conducted an IPO in Canada and/or the United States. There are reported advantages and disadvantages determining which country and exchange a company should use when conducting an IPO. This study will probe the reasons behind the decisions of companies that have undertaken this process.

Demographic Study of Informal Investors in Canada
This study will aim to transform angel profile data (refer to the completed study Practices and Patterns of Informal Investment) into national proxy data, allowing for a better understanding of the presence of informal investors in Canada and their potential impact on the economy.

National Survey of Informal Investors
Using the results of previous research that profiled typical informal investors, this study will develop a national representative survey of informal investors to estimate their total financing impact annually.

Data Availability

For those seeking additional information regarding the SME Financing Data Initiative, including research results and findings, there is a dedicated Web site as a part of Industry Canada's Strategis site (http://strategis.ic.gc.ca/fdi). It enables stakeholders to find out about a project's origins, partners, objectives, data studies and findings. Information about upcoming surveys and past studies will be published on this Web site. Users will find the summaries, methodologies and key findings of surveys and studies that have been conducted. In addition, some aggregate data from the studies will be available for further analysis. As much detailed data as possible will be available from Statistics Canada, consistent with protecting confidentiality.