Understanding Joint Venture
While a joint venture promotes productivity and growth, finding the right partner is what matters most to enjoy success. Now to get this thing done, it will be critical to perform due diligence in doing thorough research. By doing this, it will actually help you to save valuable time and money by finding a partner through social media, in an existing customer, supplier or investor.
The truth is, in social media you can find several companies that follow you, added you as a friend or has visited same pages as you do which helps in forming a 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. A lot of companies publish key financial data on their site and is available with Registrar of Companies. You have to download the latest accounts and review it or watch news in order to learn the latest stories regarding your prospective joint venture partner.
You must make enticing offers w/ the JV partner in question and discuss the everything that is part of the deal from customers, intellectual property rights, finance, legal issues and so on. When creating a draft proposal, be sure that you state clearly what your objectives and aims are. Say for example that the prospective partner is pleased with your offer, you can now proceed to the next step which is creating an agreement that consist of the following details: exit strategy in the future, makeup management team, investment and stake of every party and legal status of the JV. Long story short, you must learn everything about your partnership and agreement to make sure that things go according to plan.
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 might be a huge mailing list that could get significant exposure for your products fast or the proposed partner is running a forum and can help in advertising your product by putting up a banner. Basically, there are more reasons that you can find why many people are considering JV.
Since all businesses have its weaknesses and strengths, it makes perfect sense to find JV to fill the weak spots. At the end of the day, JV is about growth.