Goldman Sachs

In eighteen sixty-nine, Marcus Goldman walked into a cotton mill. The owner needed cash but had customers paying in sixty days. Goldman bought the invoice at ninety cents on the dollar and waited for payment. The owner got liquidity. Goldman earned ten percent. Repeated hundreds of times, that spread generated steady profit with minimal overhead. The model was simplicity: buy cheap, sell dear. By the nineteen eighties, Goldman evolved into investment banking. When companies sold shares publicly, Goldman underwrote offerings. Goldman bought shares at a negotiated price and resold them at three to seven percent markup. On a one billion dollar initial public offering, that generated thirty to seventy million in fees. The model stayed constant: buy low, resell high, capture the spread. Advisory fees added another layer. When companies acquired each other, Goldman charged one to two percent of deal value. A ten billion dollar merger meant one hundred to two hundred million in fees.