Gee Gardner and Dr. James Brau, Business Management
Our research involved a study on SCOR (Small Corporate Offering Registrations) and what factors contributed to their success in raising capital. My primary responsibility has been that of collecting the data from the State Securities Divisions. The State keeps disclosure documents on all SCOR offerings done within a certain range of time. From these disclosure documents I put together an Excel spreadsheet that contains the information that will be used to make our final analysis.
At the time I received the ORCA scholarship I was already engaged in collecting the data from the State Securities division and compiling it into the Excel database. I had been paid as Dr. Jim Brau’s research assistant up to that point but we decided that the funds from the ORCA would act as compensation for my time on the project from that time on. I also incurred other minor expenses from long distance phone calls to the State Security Divisions and to some of the SCOR offering companies. I spent quite a few months in collecting data from the States and putting that data into the database. There were many difficulties in this. The states all have different systems of record retention. Some were able to use their systems to find what we needed and others needed us to find out the companies names on our own. Other states did not accept SCOR offerings or only accepted them if they registered through other states. Other states also had short record retention periods. All in all we were able to have approximately 330 companies information in our database. The compilation of the information was usually very easy, though time consuming. The biggest problem was that occasionally companies used different formats of disclosure documents and therefore made it difficult to find the same standard information.
Once the companies information was compiled we tried to find information on the success or failure of the companies to raise the capital they were seeking. This information was vital to our study since it was the dependent variable we were tracking. Some states tracked this information and were able to provide us with it. But many companies’ information was only available by contacting the companies individually. At first I did this by telephone. We then tried a mailing. With the mailing we tried to also collect some useful information. The mailing had about a 10% response rate, and so the information collected from it, outside of the success failure report, will probably not be used in the final study.
When all my data collection on the success of the companies was completed we had found that 95 were reported as successes and 95 were reported as failures. These numbers are somewhat worrisome, as they seem to reflect a huge survivor bias. State employees that work with SCOR offerings have generally been pessimistic about their ability to raise capital. A 50% success rate seems extremely unlikely given our past experience with the SCOR offerings. However, we hope to do the best we can with the data and see if any useful statistical evidence of factors to success can be found. I have given the data to Dr. Jim Brau for the analysis and he will be doing the primary statistical tests on the data. Unfortunately, time constraints have made such studies impossible for him up to the present.