A textbook discussion points out that one of the main disadvantages of partnerships, compared to corporations, is the difficulty associated with raising capital. This is also true for Goldman Sachs, an investment bank. However, what is interesting in this article is that fluctuations in earnings are the motivation for the debate to change to corporation status and have shares publicly traded. The article suggests that the wide swings in revenue have resulted in some partners going to other companies where changes in annual income are not as dramatic as Goldman's. 2. But Goldman's younger partners were particularly opposed to a public sale because they believe that if the firm went public today, they would wind up with only a thin sliver of the stock in the new publicly traded company, the same partners say.
Young partners are worried about ending up with a small proportion of the offered stock.
Among the firm's alternatives to a public offering are selling more stock to outside investors in private sales, as the firm has done in the past. But people close to Goldman say that course is far less likely than other options such as retooling the firm's existing capital structure so that retiring partners won't be able to withdraw their money as quickly. This indicates that even as a partnership, they do have more options than only going public to raise new capital. However, new sources of capital would not solve the wild swings in annual revenue.