Michigan Laws 487.3405 – Venture capital investments; “professional investor” and “venture capital” defined
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(1) Except as otherwise provided by this act and in its articles of incorporation, a savings bank may make venture capital investments, or may invest in equity securities of a professional investor a majority of whose assets consist of venture capital investments.
(2) If a savings bank makes a venture capital investment under subsection (1), an officer or director of the savings bank shall not hold an equity position in the financed company, and the savings bank shall not invest more than 50% of the company.
Terms Used In Michigan Laws 487.3405
- Articles: means articles of incorporation, all amendments to articles of incorporation, and agreements of consolidation and merger. See Michigan Laws 487.3102
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bank: means a state banking corporation organized or reorganized under the provisions of the banking code of 1999, 1999 PA 276, MCL 487. See Michigan Laws 487.3102
- Capital: means the stated par value of issued and outstanding unimpaired common stock and the stated par value of issued and outstanding unimpaired preferred stock. See Michigan Laws 487.3102
- Director: means a director, trustee, or other person holding a similar position with respect to an organization whether incorporated or unincorporated. See Michigan Laws 487.3102
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: means an individual, corporation, limited liability company, governmental entity, partnership, limited liability partnership, or other legal entity. See Michigan Laws 487.3103
- Savings bank: means a state banking corporation organized or reorganized under this act. See Michigan Laws 487.3103
- Surplus: means the amount paid for issued and outstanding common and preferred stock in excess of the stated par value, plus any amount of transferred undivided profits, and any additional amounts paid in or contributed to increase total capital. See Michigan Laws 487.3103
(3) A savings bank’s investment under subsection (1) in any 1 entity shall not exceed an amount equal to 5% of the capital and surplus of the savings bank, and all investments under subsection (1) shall not exceed an amount equal to 10% of the capital and surplus of the savings bank.
(4) This section does not limit the authority of a savings bank to exercise lending or investment powers which are otherwise authorized by law.
(5) As used in this section:
(a) “Professional investor” means an investment company registered under the investment company act of 1940, title I of chapter 686, 54 Stat. 789, 15 U.S.C. §§ 80a-1 to 80a-64, a pension or profit sharing trust or other institutional buyer, or a person, partnership, or other entity a majority of whose resources are dedicated to investing in equity or debt securities and whose net worth exceeds $500,000.00 prior to the savings bank’s investment.
(b) “Venture capital” means equity financing that is provided for starting up or expanding a company, or related purposes such as financing for seed capital, research and development, introduction of a product or process into the marketplace, or similar needs requiring risk capital. A venture capital investment shall not include the purchase of a share of stock in a company if, on the date on which the share of stock is purchased, the company has securities outstanding that are registered on a national securities exchange under section 12(b) of title I of the securities exchange act of 1934, chapter 404, 48 Stat. 892, 15 U.S.C. § 78(l), that are registered or required to be registered under section 12(g) of that act, or which would be required to be so registered except for the exemptions in section 12(g)(2) of that act.