Urban Decay Case

Urban Decay is a cosmetic company focusing essentially on trendy and urban nail polish in unconventional and “cool” color. It all started in England with Sandra Lerner a wealthy entrepreneur and her former friend Patricia Holmes when unable to satisfy their needs in edgy cosmetic products, notice a considerable lack of originality and innovation in the nail polish industry. Then they decided to create together a company offering fashionable and urban nail polish product. The company built up very chaotically with no resolute bases, either legally, written or even verbal. As the company grew investor and other managers started to join the team adding equity and accentuating the partnership dilemma.

Through time the decisional power gradually shifted from the two entrepreneurs to the equity owners who invested money in the company resulting in the complete isolation of one of the founder Patricia Holmes meticulously put aside due to her lack of business background and financial leverage. Consequently three year after the founding Patricia Holmes left out with only 1% ownership of her own company filed a complained against her partners.

The case is a great however intense case of partnership agreement problems. Indeed numerous starting companies see inequality between partners emerge due usually to money, network, experience etc. In the case, as of the creation of Urban Decay it is noticeable that Sandra Lerner has a stronger power over the company; she has the experience, the financial network, the money, hence a substantial superior contribution than her co-founder Patricia Holmes; an inequality constantly growing proportionally to the company. However the dilemma really took considerable proportion when David Soward significantly invested in the company becoming general partner and Sandra Lender limited partner ; leaving with this new structure Patricia Holmes officially out of the portray as an entity owner as she didn’t invest, and out of the partner...