Arbitrary rules are clear, yet, but also blunt. If you were building a capital intensive product (see most of the alternative energy/biotech space - to get a prototype built costs millions and millions of dollars in most cases), 250k investment is really low, and probably would have no bearing on the success of a company. But for a small tech/software company whose only expenses are its 2-3 founders' accommodation and sustenance, 250k is a lot. So maybe some arbitrary rules are the right thing, but there needs to be some common sense and differentiation across different sectors. Not all startups are the same.