Difference Between Equity Stakes and Royalties?

Royalties would be specific to the product. Eventually the business will move on to other products and though the original concept may still be part of the business, it will be of diminishing interest. Very few model T's are still manufactured today by Ford today, I would actually hazard to say none. Likewise Apple no longer manufactures the Apple II+, once the life and blood of the company. By allowing the original business owner a 30% interest plus a 14% royalty is giving the original business owner an incentive to develop his original product and also to ensure that if the company survives on efforts other than that of the original business owner that the original owner's stake would diminish down to the 30% stake.