A joint venture can give your small business access to the resources and market reach of a larger company, but there are steps you need to take to make sure your company is protected in the process.
Start by making sure the agreement is clearly spelled out, advises Rob Sabo at Small Business Computing. Put the details in writing, including the goals, financial contributions, personnel, governance policy and expected length of the deal, to help ensure the project’s success and protect your company from legal issues.
If the venture is small, you may not need to form a new entity for the joint venture, but if the venture involves, say, a new technology aimed at a broad market, forming a new company for the venture could help protect your ownership interest.
Make sure there is a specific process for making strategic decisions, and communicate clearly – you and your bigger partner may have different goals and objectives.
And finally, don’t do any of this without a lawyer who’s well versed in JVs.
Adapted from 5 Tips for Joint Venture Success at Small Business Computing.