Homework Help: Business - royalty

Posted by Lena on Sunday, April 3, 2011 at 5:33pm.

I'm watching shark tank and they keep going on about royalty. They'll say something along the lines of:

I'll give you 500k for 30% equity and 10% royalty.

I don't really understand all this business stuff but what I think is going on it that they're giving 500k upfront for 30% of the company. The royalty I don't really understand. I'm thinking for every dollar made, they want 10 cents. Could someone clarify this for me? Thanks.

Business - royalty - Ms. Sue, Sunday, April 3, 2011 at 5:36pm
Yes, that's essentially what a royalty is.

http://www.investorwords.com/4330/royalty.html

I'm most familiar with the royalties paid to authors of published books. A publisher pays an author a certain percentage of the revenues from the books that are sold.
Business - royalty - Lena, Sunday, April 3, 2011 at 5:46pm
Thanks a bunch, Ms. Sue.
Business - royalty - Ms. Sue, Sunday, April 3, 2011 at 5:47pm
You're welcome, Lena.

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