Goldman Sachs is teaming up with billionaire Warren Buffet to aid 10,000 small businesses around the nation setting up a fund, which is worth $500 million dollars. It intends to support the small businesses to create jobs and provide economic advice to aid the U.S. economy. However, critics ask why now?
Goldman says it believes that a combination of education, capital and support services help to address the common problems that the small businesses face across USA. The 500 million dollar fund will help the small businesses in the areas of business and management education, mentoring and networking, and providing access to capital.
Warren Buffet, who is the largest shareholder in New York-based Goldman Sachs is also on board. There is also Dr. Michael Porter from Harvard Business School and other members from academia and various foundations. However, why is Goldman doing this and joining with Buffet?
Bloomberg suggests that Goldman with this 500 million dollar fund wants to "dispel criticism from lawmakers and pundits who portray the company as the greedy face of a financial industry whose excessive risk-taking fueled the credit crisis." Goldman's competitors make loans to small businesses, but the company's huge chunk of pretax earnings this year came from trading and investments, not from loans. Now Goldman wants to portray a better image in the public and acknowledges the role of the small businesses that they play in our economy creating jobs. Goldman and the economy need jobs so people can invest more.
Goldman even apologized for its role that brought about the financial collapse and indicated the company is going to do the right thing from now on. Goldman Sachs’s 55-year-old chairman and chief executive officer Lloyd Blanfkein speaking at a conference today sponsored by Directorship magazine, delivered the apology for Goldman Sachs’s role in some of the activities that led to the financial crisis, without providing specifics. “We participated in things that were clearly wrong and we have reason to regret and we apologize for them,” Blankfein said at the New York event. The magazine named him its CEO of the year.
Now the company feels like it has an obligation to the world and asks what it is going to do to fulfill its obligation as a global citizen to be good allocators of capital. The company feels that this newly created 500 million dollar fund, called "10,000 Small BUsiness Initiative" will be guided with those high ideals.
Written by Armen Hareyan
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