What Is a Royalty — and How Does It Work on Invent This!?

Royalties let you earn from your idea without having to manufacture a product, run a business, or raise investment capital. If someone successfully commercializes your idea, you may receive a share of the revenue it generates.

At Invent This!™, you choose a royalty percentage before your idea is ever unlocked.

Here's how it works.

What Is a Royalty?

A royalty is a percentage of revenue paid to someone who owns or created something valuable.

Authors earn royalties when books are sold.

Musicians earn royalties when songs are played.

Inventors often earn royalties when products based on their ideas generate revenue.

In simple terms:

A royalty is your share of the success of an idea.

Rather than selling your idea outright for a one-time payment, royalties allow you to participate in its future value.

How Royalties Work on Invent This!

When you submit an idea to Invent This!, you select a royalty percentage from the options available on the platform.

Current royalty options range from:

This royalty percentage becomes part of your submission and is fixed once your idea is published.

Evaluators can review your teaser and decide whether they want to unlock the full idea.

If an evaluator believes your idea has commercial potential and wishes to pursue it, they must first purchase a Commercialization License.

That license grants the evaluator permission to develop, market, manufacture, license, or otherwise commercialize the idea under the terms of the platform agreements.

Once commercialization occurs, the royalty percentage you selected applies to all Net Revenue generated from the idea.

Invent This!™ LLC serves as the royalty administrator — collecting quarterly revenue reports from the Evaluator, calculating royalty obligations, collecting payments, and distributing them to you as the Submitter.

Why Would Someone Agree to Pay Royalties?

Because good ideas have value.

An evaluator may have:

• Industry expertise
• Manufacturing capabilities
• Distribution channels
• Marketing experience
• Capital to invest

But none of those things matter without opportunities worth pursuing.

Invent This! connects people who have ideas with people who have the resources and expertise to develop them.

Royalties help ensure both sides benefit when an idea succeeds.

Choosing Your Royalty Percentage

Many submitters ask:

"Which royalty percentage should I choose?"

There is no single correct answer.

A higher royalty percentage may increase your potential earnings if an idea succeeds. However, higher royalty obligations may also make a project less attractive to potential commercializers.

A lower royalty percentage may encourage more interest from evaluators while providing a smaller share of future revenue.

Think of your royalty selection as the starting point for a potential partnership.

You are contributing the idea.

Someone else may contribute expertise, funding, manufacturing, marketing, distribution, and years of work to bring it to market.

The goal is to choose a percentage that feels fair to everyone involved.

Example Scenario

Imagine you submit an idea and select a 4% royalty.

An evaluator unlocks the idea and later purchases a Commercialization License.

The product is developed and eventually reaches the market.

Of course, every idea, product, and commercialization effort is different. Actual outcomes depend on market demand, execution, costs, and the specific contractual arrangements involved.

What Happens After an Evaluator Purchases a Commercialization License?

Purchasing a Commercialization License does not guarantee success.

It simply grants permission to pursue commercialization under the platform's agreements.

Importantly, the Evaluator must commence bona fide commercialization efforts within twelve (12) months of executing the license. Failure to do so may result in license termination.

The evaluator still must:

• Validate the market
• Develop the product
• Fund the project
• Navigate manufacturing
• Build distribution
• Generate sales

Commercialization involves significant risk, effort, and expense.

The royalty structure recognizes both the value of the original idea and the work required to transform that idea into a successful product or business.

Once revenue is generated, the Evaluator submits quarterly reports to Invent This!™ LLC. Invent This!™ LLC calculates the royalty owed, collects the payment, and distributes it to you. Failure to report for two consecutive quarters triggers Default Status, which restricts the Evaluator's rights and can ultimately result in license termination.

Can I Change My Royalty Percentage Later?

Your royalty percentage is selected when you submit your idea.

Once your idea is published, the royalty rate is fixed for any existing licenses. Future licenses are governed by the rate in effect at the time they are executed.

For that reason, submitters should carefully consider their royalty selection before publishing an idea.

Do I Need a Patent to Receive Royalties?

No.

Invent This! allows submitters to share ideas whether or not they have filed for patent protection.

While patents can be valuable in some situations, many successful opportunities involve improvements, processes, services, software concepts, business methods, and other innovations that may create value regardless of patent status.

The royalty model is designed to encourage collaboration between idea creators and commercializers.

Final Thought

Many people have great ideas.

Far fewer have the resources, expertise, or desire to turn those ideas into products and businesses.

Invent This! exists to help bridge that gap.

By selecting a royalty percentage between 2% and 8%, you're defining how you would like to participate if your idea succeeds.

Invent This!™ LLC handles the administration — collecting reports, calculating royalties, and distributing payments — so you don't have to chase down what you're owed.

You provide the spark.

Someone else may provide the fuel.

And if value is created, both parties can share in the outcome.