Christopher V. Flett

The term joint venture gets thrown around a lot, but most people are not really clear with it’s meaning or how it works.

In it’s truest form, a joint venture or JV is two or more companies coming together to build a business model and share in the profits. These companies bring together a diverse skill set, but remain autonomous from one another. Sometimes the JV is structured through an incorporated company (for liability issues) but more times than not, the companies simply form a relationship through a contract and get to work.

This can be a great model to look at if you have one side of a business model, but not the other. Maybe you have intellectual property, but not the market. Or you have the design, but not the manufacturing capability. Maybe you have anew business model, but lack the credibility because you are new. In this model each individual company covers their own costs and splits revenues accordingly.

JVs can be a great business model but require clear expectations from each participating party.

Now get at it!