When looking for money to grow operations, I recommend small businesses consider strategic partners as a source for money. I believe partnerships can be better than selling stock as the dilution can be less extensive or even nonexistent, if the deal involves prepaid royalty or licensing fees. I think of strategic partners as either a corporate partner or a supplier. Suppliers sometimes can be persuaded to defer payments if they believe in the company’s future and the increased pull through sales for their product. The corporate partner may see opportunities to increase revenue by bundling the technology in their own product or leverage their existing distribution channel to sell the product or service.
I find these types of strategic partnership opportunities often surface while developing or updating the business plan.
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