Investor Presentaiton
V. Four Models of Private Company Ventures
Generally, there are four primary models for ventures in the US:
■ Agreement with existing US business
Establishment of a new wholly-owned business
■ Joint ownership
Acquisition of existing US business
There are advantages ("pros") and disadvantages ("cons") to each model.
The importance of each pro and con will vary from transaction to transaction.
A. Agreement
Under this model, the Investor enters into agreements with US companies
for a fixed period to work together. The agreements can take numerous forms
and names. The most common forms are: mutual cooperation agreements
(where the parties will agree to cooperate to arrange transportation and
handle cargo within their respective countries or regions); agency agreements;
subcontracting agreements; distribution agreements; and connecting carrier
agreements.
Pros
Each party confines its operations
and contributions to the areas
where it has the strongest
presence and greatest expertise.
Each party carries its own risk.
Cons
■The business relationship
does not involve any financial
integration and can be easily
terminated if either party decides
that it has better opportunities
elsewhere or with others.
The Investor does not create direct
relationships with the customers
of the other contract party.
Guide to Investing in the Freight Transportation and Logistics Industry in the United States
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