In a fit of
Through 10KSB, the megafirm intends to funnel $500 million out to the nation's small businesses. The money will flow through community colleges and universities, Community Development Financial Institutions (CDFIs), and other program partners, through a combination of education and business support services, loans, grants, and investments.
10KSB is not for the freshly minted. If you've just started a home business, or your purely and truly and utterly unique idea for a store is just a gleam in your eye, you won't sniff this money. According to Goldman's website, the general guidelines for qualifying small businesses are:
- Business revenues between $150,000 and $4M in most recent fiscal year
- At least four full-time employees
- Business operations for at least two years
- Business model that could scale to create more jobs
- Predominantly in underserved markets
Blogger Kenneth Anderson, a Volokh Conspiracy contributor and Goldman fan and stockholder, argues that the program is underfunded and a ham-fisted political ploy - a sop to the Obama Administration's love for community development programs (see Goldman Sachs and Its Small Business Fund Ploy). About the money: Whether it is a lot or not depends on your perspective. $500 million is 15% of Goldman's net profits for its most recent quarter, although it's only 3% of the amount reportedly set aside by Goldman so far this year for compensation. But I think the interesting figure is 10% - $500 million being 10% of Warren Buffett's reported investment in the firm a year ago ($5 billion for preferred stock). Buffett's one of three heads of the advisory council for this initiative. If anything, the program sounds like a tithe to the needy made at Buffett's insistance.
Even if you look at it as a positive development, it's an achingly awkward one. These days, watching an investment bank/financial behemoth give away - or even lend - some of its hard earned money to "small business" (you can almost hear Goldman execs choke when they try to say those two words together) is a bit like watching your six year old as he tremblingly puts his first allowance earnings into a jar for safekeeping and then stares at it for hours as if wondering if he's made a mistake - you're proud of him but you think to yourself, "Jeez, was that so hard?"
You know, someone at the firm must be in charge of this program. I can't help but wonder what that kind of job would be like at a place like Goldman. Possibly very cool. Possibly mind-blowingly weird.