50/50 Joint Ventures - Good Or Bad?

Although I’ve only been on the Internet marketing scene for a year plus, I’ve had a fair share of joint ventures in Internet marketing.

Thankfully, most of my joint venture deals had been good… especially my first joint venture with Edmund Loh - which yielded much fruit. You can read about it here in my biography.

However, there are some other business deals that I can really live without. Fame does have a sad side to it and I can understand why some marketers prefer to stay under the radar.

You see, the demand for a writer/copywriter is normally quite good and I’ve been offered many so called lucrative deals by many marketers out there. Some of them are more established than others - kind off like the type that you’d kill to be in a joint venture partnership together with.

I remembered getting many 50/50 offers with no money up front and I thought that that was THE REAL DEAL… alas, to my disappointment… well, you know the rest of the story.

I’m not one to lament failed projects as I have lots of ongoing (and more profitable) projects on my plate at the moment.

Of late, I’m beginning to see the pitfalls of 50/50 partnership and I’m beginning to avoid it like a plague.

I’d get something along the lines of, “Hi, Khai. You know what? I think it would be GREAT if we can do a joint venture together - you know… 50/50. You do all the writing and I do all the marketing” and they usually do it right after they view my Hire-Me page (I’ve updated this page recently but I think I might add a few more terms and conditions very soon…)

To be perfectly honest, I don’t fault the partners of failed projects and neither do I fault the marketers who pitch these offers - it has nothing to do with the human being per se, but rather the NATURE of the deal.

Perry Marshall and I share the same sentiments when it comes to 50/50 JV partnerships.He says that an offer to take work with no money up front is an indication that it’s:

(1) A wobbly project with dim prospects for success anyway, since the entrepreneur isn’t able or willing to hire help

(2) It virtually assures you, the contingency-paid contractor, less respect than you deserve.

(3) What assurance can you possibly have that the guy’s going to pay you for your piece of the pie at all? He’s never cut you a check before, how do you know he’s going to in the future? And… If the thing’s wildly successful, what keeps him from chopping your arm off six months or a year later? What’s to keep him from saying, “Hey, he’s already collected over 75 grand from me, that’s more than worth the time he sank into this.” He doesn’t care if the other five projects you also did on contingency didn’t pan out.

And I agree with him wholeheartedly! Although I’m quite open to JV offers, the conversation usually stops abruptly when I request compensation or some form of ‘collateral’ for the project!

It’s not that I’m desperate for the money, but normally, their true colors show when the ball is over on their court and they are asked to serve! It is pointless to be the one absorbing all the risks!

Picture this scenario:

Someone goes to the bank and informs the teller, “Hey, Bank! I’ve got this GREAT business deal to build a shopping mall. I need a few million dollars, but I don’t have any collateral nor any proof that I’m able to service the business loan. But tell you what… why don’t we do a joint venture? You lend me the money with no strings attached and I’ll build the mall and go we go 50/50! (or even 90/10 - I’ll just take 10% ONLY!) Whaddaya say?”

Get the picture?

I’m sure that any sane bank would eject that borrower in a heartbeat! After all, why should the bank be the one to sign the guarantor’s signature?

On the other side of the coin, my other clients who are serious about their projects, pay me UP FRONT the moment I finalized my rates with them. Once I deliver the job, I watch them make thousands of dollars in their product launches and I rest easy knowing that I’ve done a good job and they are making money! It is those who pay up front who turns out to be the serious partners after all! God bless them!

Of course, I’m not implying that 50/50 partnerships are no good… I still have these partnerships going on now and my criteria for doing JVs with these partners are:

• If I trust them wholeheartedly
• They are credible enough
• We have good synergy

As of today, I no longer hunt for ‘gurus’ or ‘big deals’. I just take whatever comes to me and focus on providing a good service rather than chase after the pot of Paypal gold at the end of the virtual rainbow. Life is so much easier and the money still comes in when I focus on projects with rewards up front and other good partnerships