Questions

How do I setup a strategic partnership agreement without having to do a rev/profit share deal?

There are different companies that I want to contact to see if I could setup a strategic partnership with, where both of us would benefit. However, I want to avoid having to do a rev/profit share partnership because I feel if we both benefit in increased revenues through this partnership why would I have to make a rev/profit deal. Also, what are some of the most common strategic partnership agreements that usually take place? Are they normally a rev/profit share deal?

3answers

If you are really investing in a strategic partner (one that will provide mutual benefit in the end, either in terms of revenues, access to financing or other resources) then revenue sharing isn't absolutely necessary. In the partnerships I help to form, they are often around shared value (http://www.fsg.org/OurApproach/WhatisSharedValue.aspx) which means shared revenue isn't the absolute aim. What is the aim, however, is sharing information, knowledge, technical assistance, operational help, etc) and build a lasting framework for engagement together into the future that will benefit both parties. I am happy to help you negotiate these types of partnerships (it's what I do!) so feel free to get in touch.


Answered 4 years ago

There are many partnerships and strategic alliances created without sharing revenue. It starts with the value proposition and that one should contain a clear win/win/win: win for you, for your partner and for the customer. The partnership needs to leed to synergy, often the phrase 1+1=3 is used and thus the result of the partnership needs to be bigger than you and your partner can achieve alone.

My advise to customers is always to begin with the value proposition, from there create a clear needs/contributions/benefits matrix and use that for the conversation with your partner. It depends a bit on your business, but quite often when these are worked out well then there is no need for the business model to contain a revenue share model.

Feel free to schedule a call to take a deeper dive. As a business coach and certified strategic alliance professional it is my daily work to help companies create successful strategic alliances.


Answered 4 years ago

It's not about your willingness or someones trust in the partnership, but giving it a proper shape in the form of partnership deed. If revenue or profit isn't something that you intend to share with your partner then be prepared to compensate them in some other form.

More insight could be provided after knowing the kind of partnership you're seeking, roles and responsibilities of either party, point of mutual benefits, utilization of mutual IP et al. Feel free to DM or patch me in a call to be able to share above points.


Answered 4 years ago

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