Dogloo and Opportunity Capital Partners

Abstract

Lewis Byrd, a partner in the private-equity firm Opportunity Capital Partners, is managing a number of interconnected issues. First, in his role as investment professional (responsible for the firm's investment in a doghouse-manufacturing company called Dogloo), he has to manage a relationship with an entrepreneur who has behaved in a way that has made co-investors nervous about his skills as a CEO. The CEO, Aurelio Barretto, is a Cuban immigrant who has established a close, confiding relationship with Byrd, an African American. Barretto has increasingly relied on Byrd to run interference for him with the other firm, while providing the strategic advice that typically supports an investor-entrepreneur relationship. Another issue is a potentially costly lawsuit involving copyright infringement brought by a larger, well-funded competitor in the pet-products market. Byrd has to manage these volatile relationships while determining what's best for his firm from an investment standpoint and how best to advise Barretto to proceed. This case provides students with insights into the challenges that can occur in private-equity investing after the financial deal has been struck. The case also provides information about the technical and legal structures of private-equity financings.