A guide to growth fundraising with Goldman Sachs Growth Equity Partner Christian Resch

You can listen to the full interview in our podcast. (German)

Christian Resch is a partner at 高盛 ' Growth Equity fund for more than ten years. In this podcast episode, he reveals what you need to know when preparing for a growth funding round...

"We look for companies that have at least 10 million in revenue, are growing significantly, have an interesting market position, want to scale strongly over the next few years, and need 30 to 250 million in capital."

The Goldman Sachs Growth fund focuses on companies in the fintech, health tech, enterprise software, and consumer tech space preparing for their Series B or anything pre-IPO.?

At the later stage, where Resch invests, product market fit and a specific annual revenue are already there. Still, not all companies with a minimum revenue of more than 10 million are profitable.?

"I don't think there's any company where everything is KPI perfect,"

the investor says:

"The volume of money available to companies in 2020 and 2021 meant that the discipline, in terms of unit economics, wasn't necessarily there as it should have been. With us, companies usually expect to be cash flow positive in 6 to 7 years."

However, expectations can fluctuate greatly depending on the investor:?

"There are different types of investors in the growth equity space. As a founder, you should identify the investment criteria of the different funds to ensure you match the profile."

Across the board, he advises investing in relationship-building with potential investors, even away from the fundraising stages:

"In my opinion, it's important to maintain a dialogue with a group of investors. Venture capital investors continuously approach many companies. You should, over time, create a shortlist of investors and invest time in these relationships away from the fundraising process."?

This relationship is significant, Christian said, to be able to make a conscious decision later on about whom to bring to the table:?

"You should think carefully about whether you want that person there for a long time and during difficult phases."

As for the breakdown of the relationship between investors and founders, he believes the responsibility often lies on both sides:

"It's always a problem when a great business plan is promised that can't realistically be implemented. Of course, it is the responsibility of the founders to present an ambitious but realistic case. But at the same time, it's the responsibility of investors to assess how much a company can grow, how much cash it will take to get there, and where the risks lie."

Still, founders being pushed out of their own companies is much less common than one might fear:?

"Often, after five to six years, founders want to do something else independently. A founder must manage a company of 200 employees differently than a company of 30 people. Especially in growth phases, willingness to learn and issues like letting go and the ability to rethink is important."?

In addition to a willingness to learn, the ability to identify and solve problems is also one of the most important qualities he looks for in founding teams:?

"Usually, our founders already have a certain track record. Based on that, you can already tell how willing a team is to learn and how they handle problem-solving."

Because as every young entrepreneur knows, when building and scaling a startup, you must deal with daily problems.?

"Startups and scaleups are consistently faced with different problem sets. Whether it's a competitive situation, problems with the product, or difficult personnel decisions.?We look for founders who can identify problems, look at them objectively, and then figure out how to solve them."

Want to learn more about growth equity and other related issues?

Listen to the podcast (German) to learn what Christian Resch says about the perfect growth round pitch deck, topics like mergers and acquisitions, and other challenges in a scaling business...