Defining small to medium sized business

Somebody sent me this article about a new program designed to attract, retain and develop small to medium-sized businesses in Michigan. The Invest Michigan program is financed with $300 million of the state’s $58 billion in pension fund assets, divided into two funds of $150 million each.

There are two interesting things about this:

1. The Growth Capital Fund will make direct investments of $2 million to $7 million in venture capital and expanding companies, while the Michigan Opportunities Fund will make direct investments of $10 million to $40 million in potential acquisitions and buyouts. So, it may be a good time to remind you that in the states, a small to medium sized business is defined as up to 500 employees.

Most people in New Brunswick when they say ‘small’ business what they really mean is ‘micro’ business of maybe 50 or less employees.

2. Using state pension fund assets as another lever to attract investment to a state is a good idea to get some of the residents’ pension assets working for the state. It’s a relatively small amount but a good idea. Needless to say, I don’t think New Brunswick is out trying to attract fast growing small high tech companies to the province by dangling this type of funding opportunity in front of them.