# Question about Shark Tank and royalty deals

**URL:** <https://boards.straightdope.com/t/question-about-shark-tank-and-royalty-deals/744917>\
**Category:** Cafe Society\
**Created:** [February 2, 2016, 3:42am UTC](https://boards.straightdope.com/t/question-about-shark-tank-and-royalty-deals/744917 "2016-02-02T03:42:09Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\
**Post date:** [February 2, 2016, 3:42am UTC](https://boards.straightdope.com/t/question-about-shark-tank-and-royalty-deals/744917/1 "2016-02-02T03:42:09Z")

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IDK if this goes in GC but my question is: why do people almost always refuse Kevin O Learys deals? He usually offers a loan which is repaid as a royalty instead of taking a percentage of the company.

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**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\
**Post date:** [February 2, 2016, 3:52am UTC](https://boards.straightdope.com/t/question-about-shark-tank-and-royalty-deals/744917/2 "2016-02-02T03:52:32Z")

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A royalty deal can be fruitful for an established business with a mature product that needs access to manufacturing capital or foreign markets. But most businesses that come on _Shark Tank_ need seed-stage growth capital, and they want an equity partner who will not be sucking revenue out of the business before they even make a profit.

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**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\
**Post date:** [February 2, 2016, 4:01am UTC](https://boards.straightdope.com/t/question-about-shark-tank-and-royalty-deals/744917/3 "2016-02-02T04:01:05Z")

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> [@friedo](#):
>
> A royalty deal can be fruitful for an established business with a mature product that needs access to manufacturing capital or foreign markets. But most businesses that come on _Shark Tank_ need seed-stage growth capital, and they want an equity partner who will not be sucking revenue out of the business before they even make a profit.

ah, ok, that makes sense, thanks for the explanation.