Joint ventures get pitched as strategic alignment: two companies combining complementary strengths. That's the easy part to agree on. What kills JVs is the boring structural stuff nobody wants to spend time on during the honeymoon phase of a partnership.
Control Before Contribution
I've learned to negotiate control and governance before I negotiate what each side contributes. Who has final say on pricing, on hiring key personnel, on capital calls when the venture needs more money than either side projected? If both sides insist on 50/50 control with no tiebreaker mechanism, I walk, because a deadlock clause you haven't pre-negotiated becomes a lawsuit the first time the two partners genuinely disagree.
I now insist on a named tiebreaker, whether that's a rotating casting vote, a neutral third board member, or a pre-agreed buyout mechanism that triggers automatically after a defined deadlock period. It feels overly cautious at signing. It's the only thing that saves the relationship two years in.
Exit Terms Are the Real Negotiation
The other structural piece founders skip is exit. What happens if one partner wants out, or the venture underperforms, or one side wants to sell their stake to a third party? I negotiate a shotgun clause or a right of first refusal at formation, priced with a formula both sides agree to now, while everyone is still rational and not yet emotionally invested in a specific number.
Waiting to negotiate exit terms until someone actually wants to exit means negotiating from a position where one side is desperate and the other knows it. Get the exit mechanics done at the same table where you're celebrating the partnership, because that's the only time both sides will negotiate them fairly.