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The Strategic Partnership: The Alternative to Venture Capital

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<p> The ultimate problem for all startups is how potential users of what they do (whatever it is) find them on the Internet? </p>
<p> "You have a basic problem in marketing", was the factual way that was explained to us at a meeting. </p>
<p> I looked at my co-founder and he looked at me … we almost started laughing … exactly! </p>
<p> Now, there is no easy way for people to learn about you; to get people to your site, it takes a lot of work. </p>
<p> For many startups, the road to El Dorado is venture capital. Although there are many types, the basic idea is that these VCs will provide the capital that a startup will need, not so much to cover overhead costs, but to blow them up in the market, or, at the very least, to make you notice. The problem is that it's a slippery slope. You give VC equity (a piece of your business) in exchange for a little money. Perhaps you have a taste of success, but there is always need for more money, and more money means giving up more of your business to "turn it off". </p>
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While you would still want 10% of something rather than 100% of nothing, you can see how this could deplete your capital rather quickly.

My partner and I met such a young man at a conference. He had a sarcastic personality when we described what we were doing. As we realized that we were each in a different space, it was loosened. His exhausted behavior indicated what we were already feeling. He was beaten. He said, "Try to avoid money if you can because eventually your business will not become the business you envisioned when you had this great idea. It was a tale of warning as tense as the March ideas.

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And that's why we believe, if you can find one, a strategic partnership may be the best way forward. Here is a very good introduction: 4 tips to go further, faster with strategic partnerships

In a perfect world, your strategic partner should bring his expertise to an area you do not currently have.

What do you get?

By forming a strategic partnership with a brand larger than you, you get a "street credit". The idea that a large company has approved you and your system, and they think it would be an interesting venture for them.

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You also have their expertise. Presumably, they have done what they have done for a long time, or at least longer than you have. They will also have a lot more resources to make the expertise you need, the economies of scale to do it at a lower cost, and the power of purchase should require you to buy things, like the advertising space.

What do they get?

They have an investment. They took the time, did their market research, and see a reason to take a calculated risk on you. If you are successful, they benefit from the investment made in you. If you succeed, they will also get you an account (in all the services they provide) for the future. it is a continuous income stream thanks to the services rendered.

So while all strategic partnerships are different, when they are properly structured, they constitute a win-win scenario for both companies involved.

This article originally appeared on The Whole Magilla and was written by Chris Meyer, co-founder of MagillaLoans.com

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