The Case for B2B "Partnership"

Have you ever thought about partnership Vs. just getting paid?

There seems to be a growing interest in larger companies to hire firms whose compensation comes from performance instead of just a contract or monthly fee. Today’s Fortune 500 businesses are more drawn to the idea that you’ve got their back and are working in their best interest. They want the extra incentive that your paycheck is as big as the growth your service brings, instead of trusting that you're working hard every day.

This increased interest also can lead to what’s known as a J.V. (Joint Venture) between two companies. An agreement would be drawn up and agreed upon where your company would get an equity share of the Fortune 500 company in return for your service. Having this alignment can be a security blanket for the larger company, giving them reassurance that you’re going to work to the best of your ability to increase their market share or launch a new product. Also the upside for your company could be huge depending on the circumstances of the deal and success of the product, marketing or sales team development.

So what can a J.V. offer and why would a company give up equity for a service? A J.V. could offer services like creating a sales team and training them to sell a new service/product. It could also help with launching a product domestically/internationally, while determining how to present the product to the right customer. The more you have to offer, the higher equity share you can negotiate.

The concept is like the old saying of “A rising tide raises all ships”. Success in business and life is a team effort. The more your company can offer to others while functioning on a performance basis or as a J.V., the more enticing your company will be to the bigger fish or the next game changing tech company who needs to tell the world. I’m not saying to abandon your current business model or parish, but I do think offering performance compensation or a J.V. option is worth a look at least.

Has your company adopted either of these two concepts?