A joint venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets.
Finding Joint Venture Equity has always been one of the most difficult things to do. To help you along with this process, we at AGI thought we would share with you the keys to raising joint venture equity.
When raising joint venture capital, AGI is prepared for a lot of “no’s.” When a joint venture capital says “no,” it doesn’t necessarily mean that your venture is not a good one. It simply means that the venture is not a good investment for them. You must have “thick skin” and be able to bounce back from lots of “no’s” and persevere.
When failing over and over again to create the light bulb, Thomas Edison famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.” This is the same mentality AGI has with investors. We never stop at no. We just believe that we have just found 100 investors that aren’t a good fit.”
One of the most important things to show in your business plan is what you’ve accomplished in your business to date. And ideally, every month you are accomplishing more. So, at AGI we make sure to update your plan with this progress.
In raising money, the best company doesn’t always win. Rather, the guy that knows how to best market his opportunity wins. That is, the entrepreneurs that are best able to market their companies to lenders and investors are the ones who raise the money. AGI has a wealth of experience with entrepreneurs and their start-ups so you can trust us to know the strategic marketing your company needs.
No matter how great your project or idea is, you are probably not going to get a $20 million check right away. Rather, you will typically raise several “rounds” of capital.
AGI starts with a smaller round or amount of funding. Then, as we help you grow your business, we make sure that you are eligible for larger rounds of funding. This is because your business proves itself over time and your valuation rises as you grow. Our strategy at AGI enables you to raise larger sums of money.
Choosing the right source of funding is the key to finding success at raising joint venture equity. Some forms of funding are much easier to raise than others. And based on your stage of development, different forms of funding are more relevant and our experience in this field is unparalleled.
To be specific, the funding sources available to a pre-revenue startup are very different than the sources available to a 3-year old company generating $1 million in annual revenues. For example: Google initially failed when it tried to raise money from venture capitalists. The key is to go after the right sources of funding at the right time.
The bottom line is the perfect entrepreneur/joint venture relationship is one where each has established respect and trust with the other well before an investment transaction is broached.”
The key is to build these relationships early. So, even if you don’t qualify for a $5 million round of joint venture capital today, AGI puts you in front of capital sources so they become more familiar with you when you are ready to qualify.
AGI understands the importance of having a “thick skin” but also understands how and when is the right time to adapt to the marketplace to better position you company to be a great candidate to receive Joint Venture Equity.
For example, if several prospective investors tell you they want to see a sample of your product or service before considering funding you, AGI positions you confidently so that everything asked for is satisfied. We make sure that your company knows how to adapt quickly and structure itself properly to make your company most appealing to investors.
By adapting to the needs of joint venture equity partners, particularly after hearing the same feedback multiple times, AGI is there to partner with you to make sure that the required changes are in place in order to raise the money you need.