Professor Joseph Grundfest explains to Angus Loten of the Wall Street Journal why he supposts increasing the private shareholder limit, and how he thinks it will help businesses.

The definition of what constitutes a small business is expanding, but not in the way that some business owners might like.

U.S. lawmakers, banks and the Small Business Administration recently have expanded the scope of what they commonly consider small.

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"Yesterday's medium is today's small," says Joseph Grundfest, a Stanford University law professor and a former commissioner of the Securities and Exchange Commission, of the emerging new definitions. He supports increasing the private shareholder limit, because he believes it will prevent businesses, like Facebook Inc., from being forced to go public prematurely.