Successful Acquisitions

Strategic Alliance

Suppose you see the need to expand your customer base, but you have hit a ceiling with your current marketing and sales effort. One simple step you can take is to form an alliance with a partner who is serving the customers you seek with a noncompeting product. You can structure the arrangement in countless ways. Perhaps the partner benefits from simply being able to expand its offering; perhaps you pay a commission on sales or leads; or perhaps it is more of an exchange, whereby you simultaneously market your partner’s product to your existing customer base.

The appeal, but also the risk, of such an arrangement lies in the absence of equity investment. Neither party has an ownership stake in the outcome. Of course, the legal ...