I love joint ventures!
I’m contacted pretty regularly with joint venture opportunities. There have been some nice successes and there have been some stellar failures… but I love working with like-minded entrepreneurs who want to share in the struggles and triumphs of a JV and I always keep my ear to the ground for new opportunities.
So, I thought it might be helpful to make a list of the types of things I look for in a JV. I turn down more JV opportunities than I accept and there are many reasons why I accept or reject a JV idea. I’ve tried to capture it all here in one place for people who might want to present JVs to me:
WHAT I LOOK FOR IN A JOINT VENTURE
- Is there a pressing need in the marketplace that can be filled? The JV idea doesn’t have to be fully formed before it is presented to me. A good idea (heck, even a half-baked one) is enough to get started. We can work together to figure it out further. (I like to think that’s one of the things I can bring to the table). I really like to see a need identified and a way to solve that need but if all you’ve identified is a pressing need and a vague notion of how to solve it, that’s cool too.
- Is it a niche that I’m comfortable working in? I generally stick to topics that I know well — business (B2B, marketing, sales, strategy, copywriting), finance (investing, stock market, commodities, FOREX, accounting, business finance, financial management, cash flow), and real estate (especially related to real estate investing).
- Can I add value with content (either to market/sell or as part of the deliverable)?
- Has the JV partner done their homework? I want to see that you have done your homework and know why this is the best time for this opportunity and why you and I are the best people to pursue this opportunity.
- Am I excited about this? That’s a huge one for me. I need to be excited about the project… it’s the only way I can sustain any effort on it.
- What is the opportunity here? I get a lot of ebook joint venture ideas or ad-based-blog joint venture ideas. Those are fun but I’m open to creative arrangements. They don’t have to be an entirely new business. I’ve worked with existing brands on co-branded books, shared revenue for an ecourse, etc.
- What is the sales funnel? How do we expect to get leads? How do we expect to turn those leads into prospects? How do we expect to turn those prospects into customers?
- What is required of me? Is this an investment of money? Of effort? Of expertise? Or a combination of those things? What will I be bringing to the table? How often will I be contributing — once or ongoing?
- What will the other party be bringing to the table? (Hint: I want to see that you are going to do something. I did one JV where there was no “J” at all… Learned my lesson).
- Is there a fair division of labor that makes sense with the anticipated reward?
- Is the relationship a good fit? Hey, not everyone gels with everyone else. That’s cool.
- What is the time required? I’m specifically looking at (1) the time required to set-up the venture, (2) the time required to gain critical mass where we likely start marketing, (3) the time required to get to cash flow, and (4) the time required to get to breakeven.
- What is the potential upside on this project? I want to know the optimistic upside and the realistic upside.
- What are the risks? (That doesn’t make me a pessimist. It makes me a realist who wants to be prepared).
- Who controls what? Each party in a JV has some control over something. Is it shared? How is it split? Who holds the keys to the business? Who has control over the money?
- What happens in a worst-case scenario? If the relationship collapses or if the market dramatically shifts (both of those things have crashed JVs in the past), what will be left and who will walk away with what?
- Where can this go? Is this a one-off project or are there future opportunities?
I’m always looking for new opportunities but I can’t participate in them all. These are the things I’m looking for when deciding whether or not to participate in a joint venture. If you bring a JV idea to me, I’d love to hear about it!