Understanding Joint Venture
While joint venture is promoting growth and productivity, being able to find the right partner is what matters a lot. It is integral to conduct thorough research to be able to do this and due diligence at the same time. With this, you will be able to save money and time as well by partnering with existing customer, investor or supplier or with someone whom you have met in social media.
As a matter of fact, in social media, you can find companies that follow you, added you as a friend or visited same pages as you do can help in forming fruitful partnership. Great care needs to be taken into mind when designing an drafting such agreement to be able to clarify who owns who.
At some point, it can be frustrating and tedious to locate the right partner. It’ll be imperative that you practice due diligence before you start approaching any of your prospective partner. Many different companies are publishing key financial data onto their site and available with Registrar of Companies. You need to download the latest accounts and then review it or watch news to be able to know the status about your prospective joint venture partner.
You should always make enticing offers with your prospective JV partner and spell out the nitty-gritty of the deal such as customers, intellectual property rights, finance, legal issues and so on. When you create a draft proposal, make it a point that you clearly state what your objective and aims are. If for example that the prospective partner accepts your offer, then you need to create an agreement that will include details which include stake and investment of both parties, objectives and aims, legal status of the JV, makeup management team and future exit if needed. So to ensure that things will go according to plan, it is essential to learn everything in the agreement and your partnership.
The primary reasons why you want to form joint venture partnership is that, you want support of a high profile partner who has got the resources you need for continuous growth. This can be about anything like a mailing list that can help catapult your product’s exposure or perhaps your proposed partner runs a forum and can help advertise products by simply putting up a banner. Basically, there are more reasons that you can find why many people are considering JV.
It totally makes sense to locate a JV that is capable of filling in the weak spots of your business. At the end of the day, JV is about growth.