I once worked with a client who completely changed the way I think about business growth. He ran a mid-sized tech company, growing steadily but slowly — until everything suddenly took off. I asked him what changed. His answer? “Joint ventures.”

That was the first time I really understood what a joint venture is — a strategic partnership where two businesses combine strengths while staying independent. Instead of building new tech from scratch, he partnered with a company that had what he needed. In return, his company provided the market access his partner lacked. The result? They both scaled faster than they ever could alone.

Since then, I’ve seen joint ventures reshape industries, from tech to automotive. Unlike acquisitions, they let businesses share resources without giving up control. Of course, not all joint ventures work, but when done right, they can be a game-changer.

Table of Contents

• What is a joint venture?
• 4 Types of Joint Ventures
• Joint Venture Examples
• The Advantages and Disadvantages of a Joint Venture
• Joint Venture Alternatives
• Takeaway Thoughts

Take BMW and Brilliance Auto Group, for example. They partnered to produce BMW vehicles in China, helping BMW expand in a highly regulated market while Brilliance gained access to BMW’s engineering expertise.

Or, Google and NASA — collaborating on AI and quantum computing at NASA’s Ames Research Center to push space exploration and data analysis forward.

Every joint venture is built on a contract that spells out how things work. Think: Who’s contributing what, how decisions get made, and how profits (or losses) are split. Some agreements are simple, just covering the basics, while others go deep into financing structures and decision-making authority.

Pro tip: I’ve learned that clear governance is everything. Who has the final say? How will disputes be handled? Sorting these out upfront keeps things running smoothly and avoids unnecessary power struggles.

Why Companies Form Joint Ventures

When growth feels risky, I get why companies look at joint ventures as the smarter bet. Instead of taking on the cost and complexity of a full acquisition or building from the ground up, they team up simply because it’s just more practical at times.

Right now, 60% of companies say JVs hold up better in economic downturns, and 58% see them as a safer bet than mergers and acquisitions (M&A), especially given today’s geopolitical climate. And I see the appeal.

A strong JV can help businesses:

• Break into new markets without starting from scratch.
• Share the financial and operational load of big projects.
• Leverage each other’s expertise for faster innovation.
• Streamline operations and cut inefficiencies.
• Gain a competitive edge without going all-in alone.

It’s less about ownership and more about strategic advantage — because the right partnership can get you further faster.

I’ve seen joint ventures work wonders when done right. They help businesses cut costs, boost efficiency, and share risks. But not all joint ventures are created equal. There are four main types.

1. Project-Based Joint Venture

A project-based joint venture has two or more parties working on a specific project. This agreement is usually temporary, lasting until the project’s completion.

One of my favorite examples? NASA and Boeing teaming up to develop a new type of sustainable airplane, the X-66. NASA’s goal is to reach net-zero carbon emissions in aviation by 2050, and developing the X-66 with Boeing is the first important step in this project.

Project-based joint ventures can also include:

• Construction firms joining forces to tackle a massive development.
• Tech companies co-developing a product, then parting ways once it’s launched.
• Retailers banding together to break into a new market.

Pro tip: I always recommend doing some deep due diligence before committing. Make sure you and your potential partner align on company culture, decision-making, and operational capacity. Misalignment here can be a dealbreaker later. Use HubSpot’s Free Business Startup Kit to align you and your cofounder’s vision — and even pitch your new venture to investors.

2. Functional-Based Joint Venture

A functional-based joint venture is a long-term collaboration where two or more parties share resources to support each other’s operations. Unlike project-based ventures, this one keeps going as long as it works for both sides.

Say I own a bakery. To expand my reach, I might partner with a local coffee shop. They sell my pastries, I promote their coffee beans, and suddenly, we’re both growing.

Microsoft and OpenAI, for example, began working together in 2023. Microsoft provides cloud computing infrastructure through Azure while OpenAI develops AI models that Microsoft has exclusive access to. They share the revenue they jointly produce and plan to expand their partnership with new projects in 2025.

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3. Vertical Joint Venture

A vertical joint venture takes place between buyers and suppliers — usually when a traditional supplier-buyer relationship doesn’t maximize benefits. This type of joint venture helps create economies of scale and cut costs for both parties.

One recent example I found fascinating was Honda and LG Energy Solutions investing $4.4B in an Ohio battery plant. Honda gets a steady supply of high-quality battery modules, while LG secures a long-term manufacturing partner.

4. Horizontal Joint Venture

A horizontal joint venture happens when two companies in the same industry team up to gain a competitive edge. The twist? They may also be competitors.

For instance, semiconductor producers Intel and UMC formed a joint venture in 2024 to collaborate on advanced chip production. They are at the same level of the industry but Intel provides cutting-edge chip design expertise and access to U.S. government incentives (e.g., CHIPS Act funding) while UMC, a Taiwanese company, provides manufacturing expertise in mature node production, helping Intel scale up older chip manufacturing. Moreover, this international partnership aims to help avoid future supply chain disruptions.

Pro tip: I can’t stress this enough — clear, frequent communication is non-negotiable in a joint venture, especially when working with a competitor. Transparency builds trust, and trust keeps the partnership running smoothly.

Joint Venture Examples

Telstra and Accenture

In early 2025, Telstra joined forces with Accenture in a seven-year venture to push AI and data transformation forward — fast. The goal? To embed AI deep into Telstra’s systems, improving network performance, customer experience, and efficiency across the board.

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With Accenture’s AI expertise, Telstra gets access to cutting-edge tools and a stronger data infrastructure. Meanwhile, Accenture locks in a major telecom client, helping shape the AI-driven future of one of Australia’s biggest providers. For Telstra, this means faster automation and smarter systems. For Accenture, it’s a proving ground for its AI innovations.

Mitsubishi Corporation and Nissan

By March 2025, Mitsubishi Corporation and Nissan are rolling out a joint venture aimed at two big things: making autonomous driving more practical and turning EV batteries into scalable energy storage.

Nissan brings the EV and self-driving expertise, while Mitsubishi taps into its massive business network to commercialize these innovations in the market. Beyond an auto partnership, I see this as a bold move to tackle real-world problems, from urban congestion to sustainable energy storage.

Volkswagen and Rivian

Volkswagen and Rivian made it official in late 2024, forming “Rivian and VW Group Technology, LLC” — a venture dedicated to developing next-gen EV software and electrical architecture, with the first models slated to roll out in 2027.

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For Volkswagen, this means access to Rivian’s cutting-edge tech to accelerate its EV roadmap. For Rivian, it’s deep-pocketed support to expand its technology across more vehicles. With up to $5.8 billion on the table, this deal focuses on making EVs more accessible, affordable, and packed with smarter software.

At its core, this is a win-win: Volkswagen picks up the pace in the EV race, and Rivian cements itself as a leader in automotive tech.

The Advantages and Disadvantages of a Joint Venture

I’ve seen joint ventures unlock incredible opportunities — new markets, fresh expertise, and access to resources that would’ve been out of reach solo. But they’re not without their challenges.

Here’s why I’d consider a joint venture:

• Access new markets, knowledge, and resources.
• Combined financial resources means sharing both risks and rewards.
• Each partner brings unique strengths to the table, making the whole greater than the sum of its parts.
• Increased speed to market — something I always appreciate in business.

Here are some reasons I may not:

• More people involved means more complexity (and red tape).
• Potential for disagreement or a partner not upholding their end of the bargain.
• Possibility of unbalanced power dynamics.

Joint Venture Alternatives

Joint ventures can be a smart way to grow a business, but they’re not always the right fit. If you’re weighing your options, I recommend considering the following alternatives as well.

Strategic Alliances

Strategic alliances are agreements between two or more companies that involve sharing resources, such as technology or personnel, to achieve a shared goal.

I like to think of a strategic alliance as teaming up without tying the knot. The key difference from a joint venture? You don’t have to create a new legal entity. Each company stays independent while working together, which makes this a more flexible option if you want the benefits of collaboration without giving up control.

Partnerships

A partnership is a formal agreement between two or more people to run a business together. It comes with some big perks — shared profits, access to more capital, and a bigger network — but it also requires trust. If one partner decides to leave, things can get complicated fast.

I find Gauri Manglik’s perspective, as CEO and co-founder of Instrumentl, apt here: “A partnership can help you maintain more control over what happens with your company than a joint venture or an alliance. You maintain the autonomy to make decisions and keep the rights and responsibilities to your brand and product/service offerings.”

Pro tip: Choosing between a joint venture, strategic alliance, or partnership comes down to how much control you want to keep and how much risk you’re willing to take. If you’re unsure, I’d recommend talking to a business lawyer to make sure you’re making the right move and protecting yourself in the process.

Takeaway Thoughts

I’ve seen firsthand how powerful joint ventures can be when they’re set up right — but I’ve also seen how easily they can go off the rails. Without a solid plan, clear governance, and real trust, things can fall apart fast. That’s why so many businesses opt for strategic alliances or partnerships instead — collaboration without the legal and operational headaches.

If you’re thinking about a joint venture (or any kind of business partnership), prioritize laying the right groundwork upfront.

Editor’s Note: This blog was originally published in December 2022 and has been updated for comprehensiveness.