General partnership or joint venture with global online company?


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I want to establish a partnership with a company abroad that offers online services through their portal in few countries worldwide. I would like to leverage their online platform to provide services locally and connect it to their existing network. I would like to establish long time relationship with them where we both exercise control over the business and consequently share revenues, expenses and assets. One way of doing this is to establish a new entity and thus form a joint venture. The other possible way that I can think of, is to create general partnership and provide services under their name (which I assume is preferred by the partner).

What are the advantages and disadvantage of each of them?
What are the other possible kinds of partnership which we could establish?

Venture Website Partnerships

asked Dec 3 '10 at 08:26
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Mmiesi
33 points

1 Answer


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The advantage of doing buisiness under your own name is more attractive. If you can form a partnership where your COMPANY has a territority or has exclusive rights to manage their software in (for example ) Canada for 3 years, you can leverage their existing platform to get you started.

The problem with partnerships is that you have to have a shared vision, set of goals, and ethics. You may be in it for Money while they have other goals. You might want monthly cash revenue, while they may want to build something to attract investment. You may want to reinvest in development or advertising, while they may want to spend the earnings? If you are on the same page, share the same exact goals then a partnership makes sense.

I personally would like the arrangement where your company has exclusive right to use their assets in a region for a specific area for a profit sharing scheme. This allows you the flexibility to run it as your own business. And if things change in the future, you may be able to build the application in a direction you like (one that is different than the company that you have a relationship with.

Its sort of like using Bing for your search service in your site, rather than actually building your own search engine. It lets you get started quicker, it allows you test to see what your customers do, but you are not part of bing. So if it later makes more sense to use a different search feature for your site, you can.

Most flexibility comes from your own company with a strong working relationship with another company. Later on you can always blend the two companies in a MNA and become one.

answered Dec 3 '10 at 23:36
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Frank
2,079 points

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Venture Website Partnerships