H. Irving Grousbeck, Sara Rosenthal
Stanford Graduate School of Business (E567-PDF-ENG)
January 01, 2016
Coley Andrews never knew that when he co-founded Pacific Lake Partners, a search fund investment firm, in 2009, he would spend as much time managing people as the company’s investment strategy. Pacific Lake had grown its portfolio to 30 operating companies plus 30 active search funds in the six years since its inception, and Andrews regularly interacted with many of the CEOs, either as a board member or as an informal advisor. Although several of Pacific Lake’s transactions involved complex financial structures, Andrews had learned that few problems were more difficult than some of the interpersonal challenges she encountered from time to time. In the first vignette, Andrews learns that a seeker with whom Pacific Lake has made a soft investment commitment has forged part of her resume. Andrews and her partner Jim Southern decide to withdraw their commitment from the search engine and send a letter informing the investment group of the news. Andrews has to prepare to respond to the inevitable flood of calls. In the second vignette, Andrews learns that a fellow board member withheld from the CEO knowledge of serious indiscretions, including sexual harassment and relationships with an employee. Andrews must decide how best to confront his board member with this troubling news.
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