Types of Business Partners that Do Not Contribute Capital

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Whether you are starting a business or simply looking to partner with someone to help give your business a boost or a new life, you may want to consider partnering with a business collaborator. Although the type of financial relationship that links the two parties is what normally defines partnerships, there exists ways you can collaborate with someone, to the benefit or your business, without them contributing capital into your organization.

Nominal Partner

  • When a well-known person associates herself to your business in a way where she lends her name for your use, she becomes a nominal partner. A nominal partner does not have any investment in the business, profit shares or decision-making power. She simply remains a liable third party for the acts of the organization. An example of a nominal partnership would be a celebrity giving her name and support to a nonprofit cause that helps the nonprofit organization gain support from other people who are fans of the celebrity. In this type of partnership, either the partner is giving her name for free or she could also be paid by the organization itself for her involvement in advertising and promotion campaigns.

Non-Equity Business Partner

  • For many businesses that do not want financial partnerships, non-equity business partners are preferred. In this instance, two separate businesses join forces and create a strategic business relationship, agreeing to share resources while keeping their finances separate. In this instance, the resources that are generally shared include a clientele, software and communication channels. Non-equity partnerships do not lock owners of either partner into a legal partnership that allows for both businesses to change, evolve and keep the relationship going only for as long as it is beneficial to both parties.

Joint Ventures

  • The mid-1980s saw the emergence of joint ventures. A joint venture partner is an organization or businessperson who partially integrates his activities to that of another business partner. The shared activities of joint venture partners are normally related to buying or selling operations, natural resource exploration or development, production operations and research and development. Joint ventures often exist only for a predetermined period of time, or until a specific project is completed; these are not necessarily long-term business relationships.

Strategic Partner

  • According to David Teece, a strategic partnership is defined as a web of agreements where two or more business partners bring together their resources and coordinate their activities to reach a common-shared goal. A strategic partner provides a higher degree of strategic and operational support and may be involved by contributing to initiatives such as research and development, technology exchanges, exclusionary market and manufacturing rights and co-marketing agreements.

References

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