Lonch In a Nutshell
Create a product or contribute to an existing product.
Earn Royalty Tokens proportional to your contribution.
Receive regular paychecks as products begin to make a profit. As long as the product is making a profit, you’re earning money.
Contribute to multiple products to ensure you are building a diversified portfolio of future earnings.
How Royalty Tokens Work
We all know how crowdfunding for products worked in the past. You pledge money, and in return you get a reward, usually a preorder of the product, or some extra goodies like a t-shirt or intangible like access to information or a your name in credits.
But what if you could also invest in the success of the product? The more the product sells, the bigger your payback. And what if you could directly help the product become a bigger success with your personal knowledge, experience and grit?
Let’s go through an example.
Meet Tricia. She’s a visionary… with a product idea.
The only problem is that she doesn’t have the money, or team she needs to make the product. So Tricia turns to Lonch to help her raise money and build a team from our social network of Contributors. She signs a License Agreement with Lonch, which opens up the option of investing in the financial performance of the product.
Now she sets up a Product page with Lonch. She tells the community and the world about her great new product idea and creates a Raisr campaign to allow people to buy royalties into the product’s success. Some people, Mike and Lucy, believe in the idea so much that they join the product to help guide and contribute directly to its success. Mike and Lucy then begin putting their hard won experience to work on the product for “free” in exchange for Royalty Tokens. They’re able to do this, because they have unique skill sets that Tricia needs to see the product to market.
Investment Crowdfunding (Royalty Tokens)
Royalty Tokens make this all possible. Now people can invest into the products future success. As a potential investor, you evaluate the investment opportunity. You’re a savvy investor, so you carefully weigh the risks against the potential returns and the team’s ability to execute. You decide to take the plunge and buy a few Royalty Tokens, or dive in head first and join Tricia’s product team as a Contributor.
Other investors agree with you, you trend setter you, and the product is well funded and has the start of its founding team to bring it to market.
Ok, so where does the revenue for the product go? When the product succeeds and is released to the market. The money raised pays off operating expenses, and the left over is divvied up between Lonch (for its awesome platform and facilitating this success), the Product Visionary, and the Contributors. The profit is entrusted to Lonch per the license agreement, which is then dispersed to all Royalty Token holders in the product.
Now, it’s possible that the expenses and monthly operating expenses result in negative profit. That’s OK! The Contributors are empowered to optimize their product to maximize profitability.
Enter Yinka, he has seen this before. He sees a great product that isn’t getting the market traction it should. With a new distributor, some brand help, a few changes to the website, and some search engine optimization, bingo bango the product is off to the races! The team that struggled to see success sees this contribution for the game changer it was and proportionally compensates Yinka with Royalty Tokens for the huge impact he brought to the product. Now, over time, the product will generate a profit and it will be dispersed per payment period to the product Contributors.
How Much Do Contributors Get?
Now you’re thinking “Cool! How do I get my paycheck!?”
By contributing you won’t be the only investor. There are likely to be many investors (by design). So the paycheck is distributed at regular pay periods agreed upon in the license agreement (usually bi-weekly or monthly). The amount distributed is according to the proportion of Royalty Tokens you own relative to the total distribution of Royalty Tokens. Yes, this means that they’re dilutable. The more people contributing, the less each individual Royalty Token is worth. But luckily you’re a member of the product team and you are making sure people are only working on important work that adds value, not busy work. This translates into more value for the overall product, which means more value for each Royalty Token. Additionally, products are encouraged to apply a multiplier schedule to help front load distribution of Royalty Tokens for early contributors that took on the biggest risk and helped bootstrap a product.
When a pay period event occurs if you own 10% of the shares, you’ll get 10% of the royalties. If you own 20%, you’ll get 20%. And so on. As long as the product is generating revenue, you will be earning royalties. Your product successes has now become your investment portfolio.
Remember your day job? You got paid for last weeks work, but that was a one time deal. Even though it had an impact that reached far beyond that weeks work of effort. With Royalty Tokens your paycheck might be smaller pay period over pay period if you don’t continue to contribute, but it continues as long as the product generates revenue. Eventually your royalties might displace your traditional salary, and you may decide to go all in with Lonch. We would be lucky to have you.
Above copy lovingly “inspired” from Fig, we hope they see it for the flattery it is!
Royalty Tokens For Core Products
Create this Infographic and Earn
100 Royalty Tokens with Lonch
Create a Sankey Flow Infographic to demonstrate how Royalty Tokens
flow from revenue to Lonch Core Products to pay to Contributors