JVs also have disadvantages:
- Most importantly, you no longer run your own show. You now have a partner that has a say in any material decision.
- JVs are typically complex and time-consuming to negotiate and set up.
- The ongoing need for consensus means JVs are often complex and slow in decision-making and execution.
- If the business goes well, substantial value will get tied up in an entity separate from your company -- diluting your value. Note you probably will not be able to recognize any of the JV's revenue either.
- JVs can be difficult or impossible to exit -- witness Yahoo's estimated $8B stake trapped in Yahoo Japan for the last fourteen years.