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What Is a Joint Venture (JV)?

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity.

Requirements for Joint Ventures

The key elements to a joint venture may include (but are not limited to):

  • The number of parties involved
  • The scope in which the JV will operate (geography, product, technology)
  • What and how much each party will contribute to the JV
  • The structure of the JV itself
  • Initial contributions and ownership split of each party
  • The kind of arrangements to be made once the deal is complete
  • How the JV is controlled and managed
  • How the JV will be staffed

Do Not Choose the Wrong Partner

  1. Someone who has a pattern of dishonesty, a pretty big sign that they do not is when they don’t completely answer your probing questions into their own business affairs and financial history.
  2. A partner who is not transparent with you is dangerous and a Partnership Killer.
  3. Someone who is dysfunctional in areas that is important in a successful real estate joint venture.
  4. Someone who has nothing to contribute to the partnership.
  5. Someone who is lazy and won’t contribute.
  6. Someone who is too busy with a million other things and will never actually have the time to contribute to your partnership.

Choosing the Right partner

  1. You want someone who is honest and who has integrity. That is actually no small challenge in this day and age.
  2. Your partners should be people you respect and admire.
  3. Each partner should be someone with whom you have a kindred spirit.
  4. Obviously, you need to get to know someone before you jump into a partnership with them.