For a business that owns a vertical and needs a product it can't build. I build it and run it on low input; you sell it into the market you already stand in and keep the larger share. The method prices both halves so neither side is quietly subsidising the other.
I build it. I run it. You sell it.
LEVER and RECALL are diagnostics: a client pays to find out what to build. STAKE is a partnership: a business that already knows what it needs, owns the route to the buyer, and lacks the capability to build and run it. The unit of analysis is a revenue stream, and the question is whether it pays both parties for years — not whether it launches.
Standing in the market, credibility with the buyer, the selling relationship. They do the selling and take the larger share.
System, domain method, hosting, updates, second-line support. Paid by a royalty for the asset and a service fee for the running — two lines, because they fall at different rates.
Ten full-time staff and around fifty contract teachers. While automating their operations, the tools the founder needed turned out to be tools the whole industry needed. The case study →
A royalty pays for the asset and falls as the partner's cash covers more of the build. A service fee pays for the running and does not fall when the build is paid for — because the support calls arrive in year two regardless.
Royalty. AS = asset share from the Motion Ledger (0–1). c = share of the build funded in cash (0–1). Clamped to 5–18%.
Service fee. RS = run share from the Motion Ledger (0–1). Clamped to 3–12%. Paid as a percentage with a monthly floor.
| Line | Equation | Case | Pays for |
|---|---|---|---|
| Royalty | Ry = 20% × AS × (1 − 0.4c), clamp 5–18% | 9.0% | The asset. Falls as cash covers more of the build. |
| Service fee | Sv = 10% × RS, clamp 3–12% | 8.1% | The running. Does not fall when the build is paid for. |
| Total | T = Ry + Sv | 17.1% | The partner keeps 82.9%. |
Asset — system 50 · domain method 30 · concept 20 → AS.
Run — hosting 25 · updates 40 · second-line support 20 · first-line support 15 → RS.
Score each row by who actually does it. The shares fall out of the ledger; nobody negotiates them.
A pure revenue percentage is a second royalty wearing a different name, and it pays nothing in the year the support calls arrive. In the case: £350/month, with the percentage overtaking the floor at £52,174 of annual partner revenue.
RQ = annual income ÷ annual run cost. Below four, the stream is a hobby with an invoice attached. Try it with your own numbers — the calculator runs the equations above.
At £100k of partner revenue: two hours a month to run it gives RQ 5.7 — carry. Eight hours gives RQ 2.2 — don't. The rate is irrelevant next to the hours.
Raising maturity revenue from £100k to £150k pulls year six to year four — as powerful as doubling the signing rate. The take rate barely registers.
Not honesty — capability. A business that invoices everything as one line cannot report product revenue separately even when it wants to. Build the reporting before the product.
Both lines are characterised as royalties paid to the UK company. No LLC membership interest in the partner. Structured for 0% withholding under Article 12 of the UK–US treaty. Not tax advice — confirm with counsel on both sides before signing.