Business - royalty
posted by Lena .
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.
Yes, that's essentially what a royalty is.
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.
Thanks a bunch, Ms. Sue.
You're welcome, Lena.