A guide to creating a joint venture consortium

What advanced work is required

The amount of advance work required varies from consortium to consortium, in most cases the developer or packager will undertake quite a bit of advanced work, including research, establishing the business model, maybe commissioning web site development , maybe getting a company or several registered, maybe buying in stock or even buying some real estate property.

How much is done, is down to the packager and getting approval for the consortium. However providing that the exact state of development is disclosed,  approval should not be any problem, as long as you can qualify under other conditions. The major one is often the value test, is the offer being made to potential consortium members value for money and in most cases the factor that makes it so, is that you have cut down the development time, compared with a group of people starting out from scratch. Therefore the more that you have done in relation to research, initial development and commissioning the quicker the consortium will be able to get going and therefore the more value it will have.

This of course is a balancing  exercise, do too much and you will not leave the new partners any decisions to make, so it will not be so much their enterprise. They may not also have chosen to go completely for your choice of purchases or commitments you have made for them, so  in some ways it can be better to underprovide than over provide.

The definition has to be detailed enough when they inherit it from you, either in written form or as a series of training sessions you provide to establish the working model. Before they are committed they will want to have confidence that the enterprise is going to go in approximately the direction they want to travel and that the conditions are such that everyone can share a single vision.

If you look at the opportunities on offer you will see that there is probably something for any level of development that partners are looking for. In most cases those entering as senior partners are entering at a less developed stage, with some development and decisions still to be firmed up, while those entering later as partners may be expecting to have a far more defined role and have less involvement in the design of the business. In most cases the value of the business will be perceived to have increased considerably once the senior partners are fully active and this is usually reflected in the better deal that they get than people coming in later.

The main doorway site and exchange site for Property Club International is at www.property-club.org  
You may also like to visit www.property-club-international.org, it  contains a series
  of articles on joint venture consortiums and the organization behind them.