Why we don't take equity
The named-ideator model uses a capped royalty instead of equity. That choice is structural, not philosophical — here is the engineering behind it.
The most common founder question in the first month of taking Maitro to senior leaders has been the inverse of what I expected. Almost nobody asked "why do you take a royalty?" Almost everybody asked "why don't you take equity?"
The honest answer is engineering. Equity would have made the model unworkable for the very leaders we are trying to reach. Royalty was not the polite alternative — it was the only structure that survived contact with the constraints. Three of those constraints were non-negotiable.
Constraint one: the day-job IP envelope
Almost every senior leader we want to work with has an employment agreement that includes a moonlighting clause, an IP-assignment clause, and a non-compete. Most are written conservatively — to give the employer a clean argument if anything ever goes wrong. None of them are designed for the case where the executive lends only their idea and their name to a separate operating company built by an external studio.
If the senior leader takes equity in a venture that is even adjacent to their employer's domain, the IP-assignment clause becomes a problem. Even if no contributed code or asset is in dispute, the relationship — being a substantial equity holder in a competitor-adjacent business — is a contract review the leader does not want to be the subject of.
A royalty is a payment, not ownership. It is taxable income reported on Form 16 / ITR. It is the same legal category as a board fee or a speaker honorarium. The leader's day-job counsel can review it in fifteen minutes and clear it. The leader does not own a share of an entity that competes with their employer, because they don't own anything. That is the point.
We had this checked, before launch, by both Maitro's counsel and the in-house counsel of two friendly CHROs at large Indian enterprises. Both came back with the same observation: the royalty structure is the only one that survives a typical Indian senior-executive employment contract review without redactions or exceptions.
Constraint two: nobody wants the perpetual relationship that equity implies
If the senior leader took 5% equity, they would be a co-founder. Co-founders sit on cap tables. Cap tables get reviewed every funding round. Investors ask co-founders questions. Co-founders sometimes need to sign things, attend board meetings, accept rights and obligations.
None of this is what the senior leader is signing up for. They are signing up to lend their name and their domain pattern recognition for twelve months while the studio builds. They are not signing up to be a perpetual minority shareholder of an operating company they do not run.
The royalty closes cleanly when the cap or the term hits, whichever comes first. After that the leader's relationship to the venture is the same kind of relationship a music writer has to a song they wrote — credit forever, royalty for a finite time, no continuing legal nexus.
Equity does not close. It dilutes, but it does not close. We did not want a model whose terminal state required a buyback or a tag-along.
Constraint three: the studio side has to be sellable
Consider the inverse. If the senior leader took equity, the operating company has a 5% holder who is famous in their domain but has no board seat, no information rights, and no operating role. That is not a clean cap table for a future acquirer or growth investor. It introduces a question to every diligence — who is this person, why do they hold this share, and what is the studio's continuing obligation to them?
Even if the answer is "nothing, the equity is fully vested and the relationship is non-operating," the very presence of the question is friction in a future transaction. Friction in future transactions is real cost.
A royalty agreement has none of that texture. It appears as a contractual obligation on the balance sheet, with a defined cap and term, and an acquirer prices it directly. There is no ambiguity about who is a holder of the company.
This matters because the senior leader's interest is also served by a clean cap table. If the venture goes well and is sold in year 7, the senior leader has already received the bulk of their royalty by then. The exit is the studio's outcome. The senior leader is not asked to vote on it, sign anything, or accept rolled-over equity.
What we considered before settling on royalty
For completeness, here are the alternatives we modelled and rejected.
A revenue share with no cap. Rejected because it creates a perpetuity. The studio would have built the product, the founder would have lent the idea — but the studio would be paying out indefinitely against a stable revenue base it now operates alone. Above a threshold, the studio has clearly earned out. The cap encodes that.
Phantom equity / SARs. Considered seriously. Rejected because the trigger event — typically an exit or a defined liquidity moment — keeps the senior leader's outcome locked to a future event the studio controls. We wanted the leader's payments to begin from quarter one of revenue, not from a future exit they cannot predict.
A consulting retainer. Rejected because it does not scale with venture success. If the named ideator's contribution is worth ₹X at ₹2 cr ARR, it is worth more than ₹X at ₹40 cr ARR — because the brand association is now anchored to a meaningful business. A flat retainer fails to track that. A royalty does.
Pure honorarium plus brand amplification, no payment. Considered briefly. Rejected because we wanted the senior leader to have skin in the outcome — to care, in a small but real way, whether the venture's commercial trajectory worked. A royalty does that without requiring them to fund anything or assume any risk.
The capped, time-bound royalty was the only structure that survived all four tests: clean against day-job IP, finite-relationship, sellable cap table, and aligned-but-finite skin in the outcome.
The cap is the founder's protection too
The most counter-intuitive piece, for senior leaders meeting the model for the first time, is that the cap is in the leader's interest as much as the studio's. Without a cap, the model becomes a rent — and rents always get renegotiated. We did not want a structure where, three years in, the studio looks at the senior leader's continuing royalty and starts wondering whether to find ways to reduce it. That kind of dynamic destroys trust.
A capped royalty is something both sides can plan around. The leader knows the maximum they can earn. The studio knows the maximum it owes. Once the cap is paid, the relationship transitions cleanly into something else — typically Council membership, jury seats on future cohorts, occasional honorary contributions. The original deal is closed and honoured. There is no overhang.
That, more than anything, is why we don't take equity. We wanted a structure that ends — paid in full, on time, on terms — rather than one that hangs around.
If you are a senior leader weighing this against a co-founder offer or an advisor offer somewhere else, the application is at maitro.in/apply. The full economics — actual rate, actual cap, actual term, and a worked example for your sector — arrive in your inbox within the hour.
— Bhaskar Anand Founder, Maitro and Talpro India LinkedIn