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This is especially interesting for the cases where the sharks ask for 50% of the company (saying that it is an equal partnership between the sharks and the entrepreneur.) They often even distinguish between 50% and 51%.

If ABC takes some of the equity, the entrepreneurs are now in a situation where the sharks + ABC have control.




Could it be that in those cases the royalty is initiated instead?


Seems like a royalty would be against the shark's interests, that's money out of their pocket whereas equity is just another chunk of your company you gave up.




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