SOW_Crowdfunding_Minority_Entrepreneurs.pdf

Solicitation: SBAHQ-15-Q-0026

Research on Crowdfunding and Minority Entrepreneurship Statement of Work

Location of Work: To be completed by the contractor off-site (not at SBA headquarters)

Time to Complete the Work: Not more than one year from the date of award

Clearance Required: None

1. Introduction

The Office of Advocacy of the U.S. Small Business Administration examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues. For more information on the Office of Advocacy, including past research projects, see http://www.sba.gov/advocacy/847 and http://www.sba.gov/advo/research/ for archived reports.

2. Background

Crowdfunding is a fairly recent and evolving financial mechanism that allows firms to raise funds outside the securities arena and from individual investors via the Internet. Interested parties also tout crowdfunding as a potential alternative avenue for women and minority entrepreneurs who may face discrimination or underrepresentation in more traditional financial avenues.

Researchers have already begun to investigate the question of whether and how minority entrepreneurs might leverage crowdfunding as a means to increase access to capital (Lehner 2014). A more specific question might be whether crowdfunding provides a financial bridge to groups such as women and minority entrepreneurs for whom access to and volume of financial capital continue to lag behind that of their male and non-minority counterparts (see, e.g., Casey 2012). Early research in this area indicates the answer to the question of whether and to what extent crowdfunding might serve as this bridge may be very nuanced. For example, the reward-based crowdfunding structure may even help to facilitate ‘activism’ based homophily or expressive, preference-based investment in similar demographic groups who may be underrepresented in certain entrepreneurial fields (Mollick and Greenberg 2014). Understanding the answers to these research questions will prove helpful to policymakers interested in encouraging minority entrepreneurship.

http://www.sba.gov/advocacy/847 http://www.sba.gov/advo/research/

3. Scope

In addition to complete Statement of Work (SOW) and other documents incorporated into the contract, the contractor’s complete research proposal will be incorporated by reference into the research contract.

This is a non-personal services contract to provide services as detailed herein and in the contractor’s complete research proposal. The Contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform this service as defined in this SOW.

The Contractor shall perform to the standards identified in this contract.

Type of Contract: The Government anticipates awarding a firm-fixed price type award.

This research project would preferably involve an empirical study of what, if any, opportunities crowdfunding provides to minority entrepreneurs. More specifically, what possibilities might crowdfunding offer to minority entrepreneurs, and are minority entrepreneurs able to take advantage of crowdfunding opportunities? For example, the research might ask if crowdfunding serves as a social capital bridge to financial capital for minority entrepreneurs; or whether crowdfunding serves as a platform for minority entprepreneurs to become more visible to angel and venture capital investors.

Alternatively, is crowdfunding a continuation of the ‘status quo’ in terms of access to capital across minority and nonminority entrepreneurs?

The results of this initial examination will prove helpful in determining what, if any, policy relevance crowdfunding might have in encouraging minority entrepreneurship.

Lessons might be learned in terms of what crowdfunding ventures prove particularly successful for minority entrepreneurs. By contrast, should the research find little evidence that crowdfunding currently encourages minority entrepreneurship, an understanding of why this was observed may also prove helpful to policymakers wishing to grow minority entrepreneurship.

Specific milestones the research should address include but are not limited to:

• Data permitting, relevant demographic (by race/ethnicity, gender, age, education level) and other descriptive statistics of interest. Data regarding self-identified minority ventures may prove helpful as well.

• Industry or venture specific statistics as they relate to minority and nonminority crowdfunding campaigns

• Where data is lacking, case studies and program descriptions may also prove helpful.

• Relevant datasets may include: publicly available market data, such as from Kickstarter.com, including whether participants self-identify according to demographic category (e.g. https://www.kickstarter.com/help/stats); Survey of https://www.kickstarter.com/help/stats

Small Business Finances (SSBF); Survey of Business Owners (SBO), Survey of Income and Program Participation (SIPP); other relevant datasets.

Previous studies on the topic include:

• Ethan Mollick and Jason Greenberg. Homophily, Gender-Typing and Investor Activism in Crowdfunding. Working Paper, 2014.

• Othmar Lehner. The Formation and Interplay of Social Capital in Crowdfunded Social Ventures. 26:5-6 Entrepreneurship and Regional Development (June 2014) 478-99.

• Colleen Casey. Low-Wealth Minority Enterprises and Access to Financial Resources for Start-up Activities: Do Connections Matter? 26:3 Economic Development Quarterly (August 2012) 253-66.

• Denis Frydrych, et al. Exploring Entrepreneurial Legitimacy in Reward-Based Crowdfunding. 16:3 Venture Capital (July 2014) 247-69.

• Nataliya Barasinska and Dorothea Shafer. Is Crowdfunding Different? Evidence on the Relation between Gender and Funding Success from a German Peer-to- Peer Lending Platform. 15:4 German Economic Review (November 2014) 436- 52.

4. Performance Requirements

The methodology and hypotheses put forth in the proposal will clearly show how the research will be conducted, are binding upon award, and are expected to be reflected in the final report. All research team members listed in the proposal, including but not limited to subject matter and technical experts, will actively contribute through the performance of this services. The resulting final submission will fully document the analysis and conclusions to fully support the position asserted.

The final product shall contain a thorough review of the current and relevant literature, discussion of the data and findings, and overall conclusions. The report shall demonstrate policy relevance to current issues. Draft products will reflect reasonable progress toward the final product and shall be submitted according to final product formatting requirements. For other details on the final product, see the “Deliverables” and “Performance Requirement Summary” sections that follow.

5. Deliverables

Deliverables and

Meetings Due Date Format For Written Submissions

Transition Method

Transmitted to Whom

Post Award Conference

10 business days after award N/A -- Phone Conference N/A CO and COR

Monthly progress reports

3rd business day of the month following initial award and each month thereafter

Microsoft Word document Via Email COR

Discussions on reports/submittals

As scheduled by request of the

COR

N/A -- Phone Conference N/A COR/Vendor

Draft(s) Report sections and data development

Months 1-3 of contract term

Microsoft Word documents and/or statistical results (no Adobe Acrobat PDF files or locked files)

Via Email COR

Rough Draft of Report Months 3-4 of contract term

Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

First Draft; Peer Review Initiated

Months 4-6 of contract term

Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

Reworked, Resubmissions of First Draft Based on Peer Review

Months 6-8 of contract term

Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

Final Draft Months 8-9 of contract term

Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

Reworked, Resubmission of Proposed Final Document

Months 9-11 of contract term

Written, submitted in a Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

Final Report Submission

Month 12 of contract term

Written, submitted in a Microsoft Word documents and formatted in accordance with specifications (no Adobe Acrobat PDF files or locked files)

Via Email COR

6. Performance Requirement Summary

Contractors must adhere to the following when submitting drafts and the final report, with the final version completed not more than one year from the date of award:

• All submissions will be presented by the prescribed timelines; presented under the prescribed methodology; in the prescribed format to the contracting officer’s representative (COR). Documents shall be clearly annotated and/or identified as either a draft or a final document.

• Contractors must seek prior written approval from the contracting officer and COR before any changes are implemented among the key personnel and other staff listed in the proposal. Individuals that the contractor proposes to use as replacements for those listed in the proposal shall satisfy the personnel experience requirements contained in the solicitation and the contractor must provide resumes for each proposed replacement as part of its request for prior written approval.

• The documented submissions related to the post award service, including the final report and all intervening drafts, must be thoroughly edited and of high professional quality before submission to the COR. These high professional quality drafts and reports shall include professional language, presentation, and citations commensurate with published research in academic journals in the relevant subject matter field and shall be free of typographical and grammatical errors.

• All research and data projects are subject to the Office of Management and Budget Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal Agencies (http://www.whitehouse.gov/sites/default/files/omb/assets/omb/fedreg/reproducible2.

pdf). Per these guidelines, peer review may range from internal Advocacy staff review to that of external reviewers in relevant fields such as academics or technical experts. Feedback from this process will be incorporated into subsequent drafts before the report can be finalized for release.

• The final report must contain an executive summary and table of contents. It must conform with the current version of one of the major style guides, such as the University of Chicago Manual of Style or the American Psychological Association (APA) Style Manual, in terms of grammar, style, and organization. In particular, each http://www.whitehouse.gov/sites/default/files/omb/assets/omb/fedreg/reproducible2.pdf http://www.whitehouse.gov/sites/default/files/omb/assets/omb/fedreg/reproducible2.pdf table and figure must have a source specified on the page; references, footnotes and bibliographies shall be formatted consistent with a major style guide; and all pages shall have page numbers, including tables and figures.

• All government agency electronic and information technology (EIT) is required to comply with the Americans with Disabilities Act of 1990 (ADA). Section 508 of the ADA’s 1998 amendments requires the electronic documents posted by Federal agencies to be accessible to employees and members of the public with disabilities to the extent that it does not pose an “undue burden.” To comply with this mandate, the final report must be formatted in accordance with Section 508 requirements. The Office of Advocacy will provide guidance to achieve 508 compatibility at the time of award; however, it is ultimately the contractor’s responsibility to provide all deliverables in accordance with the legal requirements for section 508 compliance.

Per the guidelines, written descriptions of all figures and charts in the final report must be provided in a separate document.

• The contractor will provide the Office of Advocacy with an electronic version of the final report within twelve months from the contract start date. The research is expected to progress along the timeline and benchmarks as noted in the Deliverables section.

• The final report must be double-spaced. The format of the electronic version must be a native word processing software format. An Acrobat (PDF) file is not acceptable.

All tables, graphics, and charts must be supplied in an editable software format. The font size used in the document will be no smaller than 12 point for manuscript text;

10 point for tables, graphics and charts; and 9 point for footnotes.

• The Office of Advocacy will prepare a cover page carrying the following disclaimer, "The statements, findings, conclusions, and recommendations found in this study are those of the authors and do not necessarily reflect the views of the Office of Advocacy, the United States Small Business Administration, or the United States Government.”

• Following approval and acceptance of the final report, the Office of Advocacy will assign a date for public release of the report. Upon release, an electronic final report, along with an Office of Advocacy-prepared research summary, will be posted on Advocacy's web site, http://www.sba.gov/advocacy/847, and the report also will be available for sale at cost through the National Technical Information Service.

• The definition of small businesses should be the same as used by the U.S. Small

Business Administration’s Office of Size Standards.

• The Office of Advocacy encourages contractors to publish their findings in professional journals, if possible, but they can do so only after completing the http://www.sba.gov/advocacy/847 contract. Prior to publication the Contractor must approach the Contracting Officer Representative regarding attribution to the Office of Advocacy.