Seek an advisor first, before you seek an investor. Find someone local with related experience -- maybe an attorney or a counselor at the nearest Small Business Development Center.
Check references and ask for recommendations so you get somebody you can trust. Only someone with experience and with his or her feet on the ground, the same ground you're walking on, can help you decide whether the payoff of your patent with 3 percent royalty is your best option or not.
Talk to several people, and ask them real questions. Get a sense for their experience, preferably related to sporting goods. Don't be shy about checking references.
That's vital in this case, because there's no way anybody can tell what to advise you without taking a long hard look at the specifics of your business position. Asking the question here is a good start, but it's not formulaic. It depends on factors such as market, defensibility, growth potential, management team experience and so on.
Good luck with it. One thing for sure, you have some interesting times ahead.
Related: How to Find the Right Investor for Your Business
Related: A Guide to Angel Investors
Question added to topic Money • July 7, 2011
What's the Best Way to Find Startup Money?
I am working on a deal with the largest distributor in the world of sporting goods to sell a product I've come up with. This company has already offered a payoff of my patent with a 3 percent royalty. However, my business plan isn't finished and I need more money. I know this is a really good problem for me and my company, but I'm wondering: Should I seek an investor? What's the best way, and why?