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The SBA Has a New Mezzanine Fund! – in Michigan

The Small Business Administration (SBA) recently announced its establishment of a new mezzanine fund (venture capital or private equity-like) …in Michigan. As the term “venture capital” implies, the fund invests in high growth companies based in Michigan.

According to the New York Times, the SBA and partners have committed $130 million to date. The partners and financial commitment breakdowns for this Michigan investment fund, called InvestMichigan! Mezzanine Fund are as follows:

$35 million through the investment fund of the State of Michigan Retirement Systems,
$15 million from Dow Chemical
$80 million from the SBA, in debt financing.

The InvestMichigan! Mezzanine Fund will invest $5 to $15 million in approximately 20 companies “that either do business or have a substantial presence in Michigan or are poised to relocate there.”

So you don’t have to be currently headquartered in Michigan to pursue investment by this fund. But you do need to generate significant revenue or employ a large number of people in Michigan in order to qualify. Alternatively, you can have an imminent plan to relocate there. So if you were looking for a place to relocate but weren’t sure, I’d say this is an excellent reason to choose Michigan, assuming you aren’t moving from someplace hot like Texas and can brave the cold!

Since much of the investment provided to the companies will be in the form of debt financing (hence the name “mezzanine fund”), the companies will need to have a track record and the operational cash flow to pay make the the interest payments on the investment. The companies will have the following basic criteria (in addition to the above location-based requirement):

  • Be a revenue-generating larger small businesses or medium -sized companies with revenues of >= $20 million
  • Be profitable with net income of $3 to $5 million

For more information, here’s the SBA contact info.: Contact: Hayley Meadvin (202) 205-6948 Hayley.meadvin@sba.gov; Dennis E. Byrne (202) 205-6567

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About Tiffany C. Wright

Hi! I,Tiffany C. Wright, am the author of the ebook, "Help! I Need Money for My Business Now!!" and the book "Solving the Capital Equation: Financing Solutions for Small Businesses", available on Amazon. I am the president of Toca Family Business Services, a short-term & project-based interim management & strategic and financial advisory firm, located in Atlanta, Georgia. In the past five years I've helped small and medium companies restructure and obtain over $31 Million in financing and a similar amount in purchase orders and contracts. I have an MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania and a B.S. in Industrial and Systems Engineering from The Ohio State University. Personal: I enjoy investing. I am a prodigious reader of everything from business books, magazines, and newspapers to horror and popular fiction. I read 4-6 books per month. I also love to travel. I've been to 33 countries on 5 continents and lived in Japan for 2.5 years and aim for a foreign locale twice a year. I am also an athlete and run track on the Master's Circuit. The highlight was placing 7th in my age group in the 2007 World Master's Track and Field Championships in Italy.

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The Resourceful CEO, Tiffany C. Wright

the president of Toca Family Business Services, a strategic and financial advisory firm which provides short-term & project-based C-level management. She is the author of Solving the Financial Equation: Financing Solutions for Small Businesses, available on Amazon.

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