This story first appeared in USA Today.
Goldman Sachs entrepreneur program makes its debut in Detroit.
DETROIT — A down-on-its-luck Motor City has huge potential for a rebound and can bounce back as the auto industry did a few years ago, legendary investor Warren Buffett said Tuesday.
Buffett was here to help bring $20 million in loans, education and mentor programs to Michigan small businesses in a $500 million national Goldman Sachs initiative that aims to help entrepreneurs grow jobs and revenues.
"The resources are here to have a great, great city," he said at a news conference to mark the inclusion of Detroit as the 11th city in Goldman's 10,000 Small Businesses program.
The 83-year-old chief executive of Berkshire Hathaway and co-chairman of the advisory board for the Goldman program called the city an underutilized resource, which creates a great growth possibilities. He's so enthusiastic that he said he's ready to invest his own money if he finds a suitable company.
"I have a real love for the city, and the potential is huge," he said. "The United States with a flourishing Detroit is going to be a lot better than without one."
The message: Detroit's past industrial greatness is the base upon which a new generation of entrepreneurs can build a new economy.
"With practical business education and capital, small-business owners in Detroit have a much better chance of growing their businesses and contributing to the economic recovery of the city," said Lloyd Blankfein, Goldman Sachs chief executive.
Detroit is the latest in a list of cities that have been chosen to participate in Goldman Sachs' program to support the creation of thousands of small businesses across the USA.
Under the program, Goldman contributes $15 million to support small businesses through two lending funds here, the Invest Detroit Foundation and the Detroit Development Fund. Another $5 million supports an education component to help entrepreneurs learn the basics of growing and managing a business.
Founders of about 20 local businesses have been accepted for the first classes, taught at local colleges.
Buffett said he signed on to help after being impressed by Goldman's earlier 10,000 Women global initiative, launched in 2008 to support female entrepreneurs around the world. owns about 2.8% of Goldman Sachs, by dint of warrants from shoring up the investment banking firm with a $5-billion cash infusion during the financial crisis following the collapse of Lehman Brothers in 2008
The 10,000 Small Businesses initiative was rolled out in New York City in 2010 and launched later in nine other metro regions — Chicago, Cleveland, Houston, Long Beach, Los Angeles, Miami, New Orleans, Philadelphia and Salt Lake City — before Detroit. Applicants may come from anywhere in southeast Michigan, but must be willing to travel to Detroit for the classes.
Buffett predicted that hundreds of small-business owners over time in metro Detroit will go through the training program, developed by the private Babson College business school in Wellesley, Mass.
A more limited version, offering capital but not the educational or support services, is running in six states: Kentucky, Montana, Oregon, Tennessee, Virginia and Washington. Altogether about 1,700 businesses have participated in the program.
"I met one guy in Chicago that actually had an MBA, and he said he learned more from this operation than he got from his MBA at a very prominent school," Buffett said earlier. He owns about 2.8% of Goldman Sachs because of warrants he received from shoring up the investment banking firm with a $5 billion cash infusion during the financial crisis following the collapse of Lehman Brothers in 2008.
"I really like the program," he said. "It works. I would not spend my time on it otherwise, frankly."
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