Strategic Partnerships and Joint Ventures for Startups

Authored by Bryan Springmeyer Bryan Springmeyer is a California corporate attorney who represents startup companies. The information on this page should not be construed as legal advice.

The What

Strategic partnerships are relationships between two entities that complement each other. In the world of startups, the parties to these agreements often include a larger, more established company, and the entrepreneur or startup that compliments that company.

The Why

Strategic partnerships benefit the startup by providing working capital, resources, quicker revenue, and accelerating the growth of the company. They benefit the established company by complimenting the existing products or services. If, for instance, a large software company decided to create a multimedia plugin for web browsers, they might be open to partnering with developers who create projects for that plugin format. The larger company may likely provide startup capital for the developer(s), support for the development, and promotion of the new product. In addition to helping the startup, the software company benefits from wider adoption of its new product.

The How

Strategic partnerships are formed through a contract detailing the relationship between the two entities. Some lawyers draft a "Strategic Partnership Agreement," but more commonly, the relationship is laid out in a joint venture agreement, a licensing agreement, or a distribution agreement.

Related Pages:

Structuring Joint Venture Agreements