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Tarun Vidhani | Finance | Mutual Funds
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Day
5
of
decoding
startup
terminologies...
In
season
3
of
Shark
Tank
India
you
would
have
noticed
that
Sharks
are
asking
for
royalty
it
a
lot
of
deals
they
do.
So
what
exactly
is
this
Royalty
and
why
are
Sharks
so
keen
to
have
this
as
par
of
their
investment
terms?
See
Royalty
is
nothing
but
a
commission
which
Sharks
would
get
on
every
sale
the
business
will
make.
For
example
if
a
pen
is
sold
for
Rs.
10
and
Shark
wants
a
10%
Royalty.
This
means
that
the
Shark
will
get
Re.
1
on
each
pen
sold.
As
simple
as
that.
Now
comes
the
part
that
why
they
want
Royalty?
So
the
very
simple
answer
to
this
would
be
that
there
are
businesses
which
seems
risky
to
invest
and
in
order
to
get
some
assurance
of
the
returns
,
Sharks
asks
for
royalty.
It
makes
then
feel
safe
and
reduce
the
risk
of
investment.
I
personally
don't
like
this
concept
and
I
will
tell
you
the
reason
in
the
next
video.
What
are
your
thoughts
on
this
?
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#Money
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