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Ideally, I'd like to just flat out buy the work and then make full profit from the shirts rather than always having a cut taken out, so that is why I would have a cap.
Perhaps s/he would prefer this as well particularly given that it will be a start up. Take it into consideration when negotiating.

As was suggested, get it all in righting and try to get exclusivity to the extent you can. An outright buy of the design would be more of an assurance of exclusivity.
 
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