Joint Venture
A joint venture is an arrangement between one or more businesses where they bring together their resources (such as money and knowledge) to work jointly on a project and accomplish a specific objective. The joint venture is legally considered a separate entity from each party’s business.
Joint ventures are common in Internet businesses. For example, many premium domain name owners who lack the cash or expertise to properly develop their domains sometimes create joint ventures for domain development projects. The domain owner contributes his valuable domain to the joint venture and the other participants contribute the cash and knowledge required to develop and monetize the domain.
Thus, joint ventures are a great way for a participant to acquire resources not available to his business and enables him to share business risk with other parties. As with every business transaction, a joint venture agreement must be drafted which specifies how profits and costs will be shared among the parties involved.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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