How It Works
If two or more parties think they can mutually benefit from an entrepreneurial opportunity, they may enter into a joint venture (JV). In a JV, all interested parties take a stake in the project by contributing capital (sometimes known as putting "skin in the game").
For example, suppose Company ABC and Company XYZ agree that Project P will be profitable. Project P requires an initial investment of $10,000. The companies agree to create a JV, and each pledgs $5,000 in funding (50% each). If Project P generates $1,000 in earnings in year 1, each company gets $500.
