Get Your Business Funded: Creative Methods for Getting the Money You Need

Strategic Alliances

Mergers and strategic alliances are similar in that both involve two businesses teaming up in one way or another. But that is where the similarities end. It is their differences that are far more striking. Whereas a merger (all or part) involves the sale of a prime business asset to another firm, a strategic alliance is the sharing of mutually beneficial assets and therefore requires that the two businesses meet as equals to accomplish a goal.

Because you are the party seeking the funding, you must bring something to the joint venture that the other business wants, something they do not have that is of value to them. Contacts, contracts, partners, distribution channels, customers, marketing know-how, property, venues, copyrights, patents, trade secrets—it could be almost anything. Whatever it is, if you are going to trade its value in for some cash, it must be something the other company needs.

Here are the different sorts of relationships that you should explore when seeking a strategic partnership as a fund-raising tool:

Teaming with a larger company. They have the money and you have the something else. The trick will be to get them to value your asset fairly. Again, you simply must have something unique to offer that they cannot attain without your assistance.

Teaming with an existing customer. Teaming up and doing some sort of deal or alliance with one of your existing customers makes a lot of sense and has a high likelihood of success. After all, they ...