Has anyone seen the show Dragons' Den, or Shark Tank? Basically a bunch of people with products which could be marketable come up to a bunch of billionaires/multimillionaires and pitch a new business idea, which is based on a new product/invention. Basically the startups ask for a certain number of dollars as an investment for a certain part of their company. So for example someone might have a company based on XYZ product which nets 500k per year and they offer a 25% stake for 200k, or something like that and then the dragons (A.K.A. Billionaires negotiate on price/percent owned of company.) These guys (the dragons) know their numbers, and they know how to evaluate something which has the potential for investment. What blows my minds is that this Kevin O'Leary guy constantly sneaks out deals when he sees a product which has true value which states that he will invest based on a royalty intead of getting a percent of the company. So basically what this guy(O'Leary) always offers is something along the lines of 5% of gross sales as a royalty in perpetuity, in exchange for him giving away 250k to the business, which has a million dollars a year in sales, with no marketing, on some product you know would be a homerun hit if it went on the shopping network. Now some other Dragon (multi millionaire) will step in and offer the same person 250k for 25% of the business, with no royalty, only a 25% stake in the company. All these are obviously inventions with high margins, but what inevitably happens is every single person takes the 5% royalty deal in perpetuity, as opposed to giving away 25% of their business for the same amount. (250k) My question is WTF?!?! are these people thinking?? Who would take 5% of gross as a royalty in perpetuity over 25% of their company if they had decent sales prior to the money being invested?