3. Be Blunt About the Split.
It may seem like common sense, but the venture agreement needs to say in unequivocal terms what each business will be contributing to the joint venture.
Even if your company is contributing less than 50 percent to the venture, setting expectations for future responsibilities and profits at the outset “will ensure that you and your partner’s expectations are aligned,” reports Forbes.
4. Choose a Governance Structure.
Would you like your joint venture to be ruled like the Roman Senate or will you be the Caesar of the parties’ combined capitals and efforts?
Discuss ahead of time with your potential venture partners governing issues like:
• Who controls the board of directors?
• How can power shift within the board?
• What matters will require all partners to sign off?
• How should deadlocks be resolved?
• How will the joint venture interact with each party as an entity?
5. Get Proper Representation.
Before entering into a joint venture agreement, a business owner should always consult a knowledgeable attorney who can anticipate issues that may be unknown to a joint venture hopeful.
Keeping these considerations in mind can help business owners make their joint venture a dreamy reality and not a nightmare.