Understanding Joint Venture
While a joint venture promotes productivity and growth, finding the right partner is what matters most to enjoy success. It is imperative to perform in-depth research in order to get this done and due diligence as well. 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.
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. Just before you approach your prospective partner, it will be necessary to practice due diligence. A lot of companies publish key financial data on their site and is 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.
It is essential that you make offers that will entice your prospective JV partner and be able to talk about every single thing included in the deal from 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. 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. 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.