The Goldman Sachs Group, Inc., originally named Goldman, Sachs & Co., was founded by Marcus Goldman, a Bavarian schoolteacher who immigrated to the United States in 1848 ("The Goldman Sachs Group, Inc."). Marcus Goldman started out operating a small clothing store pre-Civil War and after the Civil War started to earn small profits through the trading of promissory notes in 1869 ("The Goldman Sachs Group, Inc."). Marcus Goldman joined forces with his son and sons-in-laws to form a general partnership in 1885 as Goldman, Sachs & Co. In 1877, Goldman, Sachs & Co. expanded to "international commercial finance, foreign-exchange services, and currency arbitrage" through a business relationship with the British merchant bank Kleinwort Sons ("The Goldman Sachs Group, Inc."). This exposure allowed Goldman, Sachs & Co. to compete against several mid-western companies and to win business from them. With continuous expansions, Goldman, Sachs & Co. diversified their investments in developing industries despite the preferred investment of most financiers to invest in the eastern United States at the time, railroads. The investments in other industries were profitable after Goldman, Sachs & Co. "persuaded companies to adopt stricter accounting and auditing procedures" ("The Goldman Sachs Group, Inc."). These oversights prevented accounting mistakes and corruption within the invested industries. With stronger numbers and results, profits from the investments were seen as others felt more secure in their investments. In 1896, Goldman, Sachs & Co. took a seat on the New York Stock Exchange (NYSE).

In 1906, Goldman, Sachs & Co. co-managed their first initial public offering (IPO). With the success of their first co-managed initial public offering of United Cigar Manufacturer, Goldman, Sachs & Co. decided to co-manage another corporation’s IPO, Sears Roebuck, in the same year. After the two successful IPO co-managements, a partner of Goldman, Sachs & Co., Henry Goldman was invited to join the boards of directors of both corporations. This led to the "practice of maintaining a Goldman partner on the boards of major clients" that continues today ("The Goldman Sachs Group, Inc."). During the 1910s, Goldman, Sachs & Co. "instituted a number of innovative financial practices that today are common, including share buyback and retirement options” ("The Goldman Sachs Group, Inc."). After the retirement of Henry Goldman in 1917, Goldman, Sachs & Co. became a limited partnership between Samuel and Harry Sachs, but nevertheless Goldman, Sachs & Co. was still a family business that consisted of three generations of Sachs.

Financial activities slowed down during World War I, but resumed in the 1920s. Goldman, Sachs & Co. took advantage of the promising economic climate at the time and formed an investment subsidiary called the Goldman Sachs Trading Corporation. This newly founded corporation expanded rapidly, but in the fall of 1929, Goldman Sachs Trading Corporation, like many other businesses, fell victim to the stock market crash that led to the Great Depression. After the stock market crash and the passing of Securities Act of 1933, Goldman, Sachs & Co. began a securities-arbitrage business and expanded through the purchasing of “other commercial paper firms in New York, Boston, Chicago, and St. Louis” ("The Goldman Sachs Group, Inc."). Through the acquisitions, Goldman, Sachs & Co. broadened their investment activities, including “new domestic and international share offerings, private securities sales, corporate mergers and acquisitions, real estate financing and sales, municipal finance, investment research, block trading, equity and fixed-rate investment portfolios, and options trading” ("The Goldman Sachs Group, Inc."). Goldman, Sachs & Co. expansion came to a halt during World War II when the government put all American industry under its supervision.

Goldman, Sachs & Co. started to gain its momentum once again in November 1956 when it was asked to co-manage Ford Motor Company’s IPO. In the 1970s, oil grew to dominate the economy and Goldman, Sachs & Co. channeled their investment funds into the oil industry, which resulted in its management of several large energy-industry share offerings. The firm continued to diversify their investment and in the late 1981 absorbed “the commodities-trading firm of J. Aron & Company, which dealt mainly in precious metal, coffee, and foreign exchange” and gained strong footing in South American markets ("The Goldman Sachs Group, Inc."). In 1982, the firm took over the London-based merchant bank First Dallas, Ltd. and later renamed it to Goldman, Sachs, Ltd. The firm expansion soon came to a stop when the market crashed in October 1987 and Goldman, Sachs & Co. was forced to downsize. With fierce competition, Goldman, Sachs & Co. was forced to seek out capital in the form of a “10-year consortium that infused the firm with $225 million in new capital” with seven insurance companies and created a holding company, Goldman Sachs Group ("The Goldman Sachs Group, Inc."). The firm also began to spin off several subsidiaries and engaged in “bridge loans, mortgage insurance, and leveraged buyouts (LBOs)” as well as the creation of the Water Street Corporate Recovery Funds, “a $500 million fund dedicated to investing in financially troubled companies” ("The Goldman Sachs Group, Inc."). In addition, in 1990, the firm introduced GS Capital Growth Fund, “a mutual fund targeted for the moderate-income investor through a minimum investment of $1,200” ("The Goldman Sachs Group, Inc."). The firm was no longer a rich client base firm.

In 1993, Goldman, Sachs & Co. became one of the most profitable firms in the world, with pretax earnings of $2.7 billion. Their success was mainly accounted for by their expansion into their overseas operations. Goldman, Sachs & Co. received another setback in 1994 after the crash in the market price of Treasury and other bonds as well as the drop of the U.S. dollar in foreign markets and discontented Goldman, Sachs & Co. partners departed from the firm with their equity. The firm did not bounce back until 1996 when it decided to pursue a more aggressive strategy. The firm began to aggressively acquire other firms, including Liberty Investment, the United Kingdom-based pension fund manager CIN Management from British Coal, and Stockton Holdings’ Commodities Corp. These acquisitions stabilized the firm’s “unpredictable trading business both in the United States and on international markets” and allowing Goldman, Sachs & Co. “to retain its leadership role in the securities and banking industry” ("The Goldman Sachs Group, Inc.").

In May 1999, Goldman, Sachs & Co. went public and listed on the NYSE, raising $3.6 billion. Goldman, Sachs & Co. adopted the name The Goldman Sachs Group Inc. and sold off 69 million shares, just fewer than 12.5 percent of the company ("The Goldman Sachs Group, Inc."). The capitals obtained from the IPO were used for the firm’s expansion projects as part of their aggressive strategy. After its IPO, The Goldman Sachs Group Inc. spend $7 billion on acquisitions. During 2001, the firm stood as the “leading adviser in merger activity” and was the “top underwriter of all IPOs and common stock offerings through the year” ("The Goldman Sachs Group, Inc."). But in 2002, The Goldman Sachs Group was in danger. The firm’s dependences on IPO and merger activity left them vulnerable. When “overall merger activity was down 42 percent over the previous year and just four IPOs had been launched in the United States from December 2001 to March 2002” the firm was questioned on their independent status ("The Goldman Sachs Group, Inc."). The Goldman Sachs Group, Inc. continued to suffer as the merger and acquisitions market continue to shrink and 75 percent of their revenues and profits came from trading and investments in 2004. The threats to the firm soon disappeared with the arrival of the 2008 global credit crisis. In the 2008 global credit crisis, Goldman Sachs “main competitors were either diminished or eliminated, leaving it well positioned to benefit from the billions in rescue funds that world governments were injecting into the economy” ("The Goldman Sachs Group, Inc.").  In addition, in September 2008, Goldman Sachs was allowed to become a bank holding company, which grants the firm ability to borrow money from the Federal Reserve.