In general, this boils down to "a man with a deal and no money meets a man with money and no deal". The man with the money finances the thing and the man with no money takes a big chunk of the profit but none of the losses.
I have just paid out £1.2m to a Joint Venture partner. He introduced a good deal in Pontefract (it's a town North of Watford), I spent about £1m improving it by building a big extension and he then found an excellent tenant for the extended part (B & M). We sold out in due course and made about £2.4m profit. He was entitled to half and that is what he got. Simples.
Probably not in that form. If you are a "team player" then you may find this kind of thing fun. But in my experience most entrepreneurs are not team players. We think we are but we are not.
Ensure that you are 100% in charge of this thing - it is your money and you will take 100% of the risk. Do NOT allow the JV partner to call the shots under any circumstances.
If you get into trouble, it will be because the JV Partner persuades or bullies you into doing something you do not want to do - been there and done that in Florida.
The agreement needs to be drawn up by a lawyer experienced in such matters and even then you may hit problems. My last JV went through three big firms of lawyers all of whom seemed incapable of grasping the essence of the deal and each one of whom screwed it up.
Avoid JVs! Just pay a generous up front commission if the deal is especially good.
Bob Cory
Modified on 16/09/2019 at 08:36:04 by ℗ Bob Cory