Nicole Desharnais has represented more than 15 private equity firms in the acquisition, disposition and management of upwards of 30 portfolio companies. She shared 5 Strategies for Successful Joint Ventures.

1. 5 Strategies for Successful Joint Ventures by Nicole Desharnais

2. Clearly Define the Agreement Terms
It noises like a no-brainer, but this could be one
of the much overlooked aspects of a JV. Make
sure that everyone involved not only understands
the principles of the agreement, but also
understands the fine details, including goals,
financial contributions, and human resources
and expected entire deal. Having the scope of the
project in writing helps protect both parties from
the JV's potential failing or from litigation issues,
and it in addition helps the joint venture reach
targeted goals.

3. Pick a Structure
The business structure will depend on the scope of the task. If you team up with
another business for a small-scale job, you probably don't have to form a new
company. However, if both companies are focusing on a new technology or
developing small business software destined for a wide-ranging market, it might be
preferable to form a new entity so that both parties have shared possession.

4. Maintain Strategic Alignment
In all likelihood, each company in the JOINT
VENTURE has different goals, challenges
and shareholders. This can complicate
strategic issues when product placement or
earnings distribution arises. Not only should
both sides recognize a specific process for
making strategic decisions, nevertheless they
should also regularly connect thoughts and
ideas in relation to change.

5. Carefully Select Governance Protocol
With two companies making decisions, things
can get complex, no matter how simple the
project. You can avoid -- or at least minimize
-- problems by establishing a governance
policy that works for both equally factors
(and get it in writing!). If each side has equal
risk in the game, a balanced governance
structure makes sense. But if one company
owns more parts on the proverbial table than
the other, some creative negotiation may be
expected.

6. Always hire a company Attorney
Unless your buddy or your aunt is a business attorney, retain the services of your
attorney well versed in JVs to view all documents and agreements. So many small
details can derail a partnership, or even sink a business, particularly if missed by an
inexperienced eye.

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