If you are actively working on many joint venture deals, or planning to do joint ventures in the future, then it is only a matter of time before someone tries to scam you in one way or another.
That doesn’t mean you shouldn’t do joint ventures, but the fact is, if you do enough of them, with enough different people, it’s only a matter of time. Especially when there is a lot of money involved and people start to act differently.
And if you think that people are not going to act differently when it comes to large amounts of money, you are delusional. Happens all the time. Even for people most of us believe are immune to such forces.
However, there is a way to almost completely avoid being scammed with money from a joint venture partner that is actually quite simple. So simple, hardly anyone I know does this and yet it will help you sleep like a baby at night knowing you have your bases covered.
What you do is get the people you do joint ventures in the habit of reviewing their books with them at least once a month.
And … you want to start doing it in advance, before signing any agreement or contract.
That way, if they have that expectation that they know you’re going to comb the books with them every month, the chances of them trying to “cook the books” go down.
In fact, in order to fool you, they will have to get really creative with the books, and most likely they are not worth the time, effort and risk.