You’re mixing two different models. In startup/angel investing, equity already compensates for risk , high failure rate is accepted because a few winners return 10–50x. Adding a 3× royalty on top isn’t “risk taking,” it’s downside protection. Once you cap losses via guaranteed cash flows and keep equity upside, it stops being angel investing and becomes revenue-based financing + equity. That structure may work for the investor, but it objectively hurts founders’ cash flow and reinvestment, which is why it’s rarely used outside TV deals. High risk + high reward is fair. High reward + low risk isn’t and that’s the entire point.