Business - royalty

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.

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  1. 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.

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    Ms. Sue
  2. Thanks a bunch, Ms. Sue.

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  3. You're welcome, Lena.

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    Ms. Sue

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