My friend and I are starting a joint venture. What’s next?

Starting a Joint Venture | via the Rising Tide Society

by @christinascalera

You’re at a conference, workshop, retreat, whatever…and you’re amped up on the community + excitement that surrounds you. You’ve met an amazing new friend. She’s brilliant, beautiful and oh, yeah, influential. You have a great idea, know how to implement it, but you don’t have a platform. Or an email list. Or an instagram following. Whatever- the point is, you two are Excited. With a capital “E.” You’re going to kill it with your new business, project, webinar, or course.

By the end of the workshop, you two have put together a business plan on the back of napkins, pamphlets and anything else you could grab. You guys leave the workshop and fly back to wherever you live to buckle down and get started.

A month later, you two launch and to your surprise, the idea takes off and does even better than expected. You ladies are living the dream- smiling and sending each other virtual high-fives as you watch the revenues climb.

Starting a Joint Venture | via the Rising Tide Society

<<DOWNLOAD THE FREE JOINT VENTURE CHECKLIST>>

Another month passes and, despite your great success, you still haven’t seen a dime of the money you’ve earned. In fact, your friend is all but MIA, leaving you to wonder if you’re even still friends. She was handling the finance part of everything (it’s not really your thing, after all) and all the funds were delivered to her PayPal account. Finally, she gets back to you, and tells you sorry, none of this would have happened without her huge platform and loyal fans, and she probably “would have had a similar idea anyway.” “In fact,” she tells you, “you probably weren’t even that influential to the whole thing after all.” To add insult to injury, she pays you less than 5% of all the profits you guys have brought in together. What recourse do you have? Would you have been better off with an agreement?

It’s not uncommon in the world of entrepreneurship to strike up collaborations (in fact, I would strongly encourage you to actively seek these opportunities). As creatives, we form these kinds of joint ventures every day. Think: styled shoots, webinars, podcasts, and affiliate partnerships. In our excitement, it’s easy to lose touch with all of the realities of a situation, including the fact that we may not really know the people we choose to work with at the beginning of the relationship. And to be fair, they don’t really know us either. This makes it crucial to have some sort of agreement in place, even if it’s just a list of your rights and responsibilities in list form sent via email. While a formal contract that spells everything out is ideal, it’s not always realistic. Set yourself up for success and a continuous relationship with your partners by being very clear, up front and honest with them (and yourself) about what you expect out of the collaboration. And if you want an agreement, make an agreement! Especially where there’s money involved.

Joint venture agreements aren’t just stuck-up, formal documents– they can also be insanely helpful when you’re delegating which person is dealing with what task. For example, on a styled shoot, more often than not everyone is so caught up in the excitement and fun of planning and set-up that any submissions to publications are merely an afterthought. If you’re going to make a joint venture an intentional and carefully planned partnership, make it so. If you need some help, grab this free checklist to help you determine if you’ve covered your bases- whether it’s formally through a contract or informally through a meeting with an email to follow up.

Legal tip: Emails will hold up in court, so unless there’s a formal contract that states the entirety of your agreement, an email may suffice in place of a more formal document. This can be good or bad- either way, make sure your emails say what you want and if you go with a contract, make sure it integrates everything you’ve agreed upon in your emails so nothing is left out!

Related Reading: 3 Ways to Make Your Contracts Better

Disclaimer: The information contained herein is not legal advice. Please contact an attorney with any questions you have.

 

Christina Scalera

Christina Scalera is a HoneyBook educator, attorney and founder of The Contract Shop, a contract template store for creative entrepreneurs, wedding professionals, and coaches. She believes every creative deserves not only a dream, but a thriving business too. When she takes off her attorney hat she can be found in random places around the world, designing graphics for her blogs or horsing around in the woods with her neigh-babies.

Leave a Reply

Pin It on Pinterest

Share This