Silverado Audio, Ltd. Case Study

2640 WordsOct 20, 200811 Pages
Case Study: Silverado Audio Ltd. Susan Song SUMMARY Silverado Audio, LTD was a 22-month old company that had been formed by an outside investor, Will Short, and Fred Smith, a British loudspeaker designer who immigrated to America. Dave and Dawn Bradley had been investigating an opportunity to buy a stake in a small start-up company in the high-end loudspeaker industry. They were contemplating an investment of $100,000 to buy 50,000 shares or a one-sixth interest in the Silverado Audio that designed and manufactured high-end loudspeakers. The investment would mean Dave leaving his career as an Accounting professor to work at the company. Dave Bradley became involved when he was asked by his boss, the dean of the business school where Dave was an Accounting professor, if Dave was interested in helping the start-up company develop a business plan. The Dean told Dave that Will was concerned about Fred’s lack of business experience and the resulting confusion and conflict that took place at work. As the business plan was nearing completion, Will asked Dave if he were interested in becoming part owner and running the financial and operational parts of the company. Dave thought the company had great potential. He also couldn’t deny that he was feeling the entrepreneurial bug. He really wanted to try to help Silverado grow and to create something valuable. Dave told Will he would think about the offer. CASE OBJECTIVES This case demonstrates the need to evaluate and analyze a business plan in depth before deciding to make an investment with a start-up company, without knowing all the parties or risks involved. The objectives include: 1. Review all aspects of a business venture. 2. Develop a business plan before investing any start-up capital. 3. Weigh the pros and cons carefully before making a decision. 4.

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