We get this question a lot, and it all depends on your industry and your royalty stream. We encourage all potential sellers to contact us for a free royalty consultation.
Royalty Exchange can facilitate sales of all types of royalty streams! Royalties from industries including music (public performance, sync, mechanical, digital, etc.), book publishing, television, film, pharmacy, intellectual property and energy can all be listed on Royalty Exchange.
Yes, you can sell any percentage of your royalty stream. Royalty Exchange will work with you to determine your funding needs to see what makes the most sense for you.
Once we sign a listing agreement with you, we can usually create your listing in less than two weeks.
To list your royalty stream on Royalty Exchange, you will need to provide us with the following information:
After we review your data and verify your royalty stream, we will discuss the following questions:
The starting price and minimum bid amount are determined by you. We want to give you complete control of your listing, as well as provide your auction with the best possible probability of success.
You will receive an expedited payment as soon as Royalty Exchange receives the buyer’s funds and confirms the transfer with your royalty distributor. The transfer process varies, but most sellers receive their funds in less than two weeks after the auction closes.
One of the great things about Royalty Exchange is that there is no charge to list an auction on our platform, so you've got nothing to lose! We only collect a fee if your item sells.
Royalties are payments made from one party (sometimes referred to as the "licensee") to another (the" licensor") for the right to make use of an asset. The asset can be virtually anything -- from tangible assets like minerals and oil, to intellectual property like copyrights, trademarks and patents. Royalty payments are often calculated as a percentage of the revenue generated by the asset's use. Visit our Learn page for additional details and industry-specific royalty information.
Royalty Exchange offers the opportunity to purchase future royalty revenue generated by an asset. Details about the royalty stream you are purchasing and the asset that generates it will be available in the Financials tab of the auction listing you are viewing.
Visit our Learn page for more information about different types of royalties and the industries in which they're paid. For an overview of what comprises a song and the different royalty rights available to musicians, visit our guide to Music Royalties.
Yes, royalty revenue history will be made available on each auction's listing page. Only earnings relevant to the asset for sale will be presented. For example, if an auction is for 25% of the seller’s royalty stream, all financials presented will reflect 25% of the historical earnings. A spreadsheet with raw royalty data will be provided for your review and analysis.
Investment terms vary depending upon factors including the type of royalty-generating asset and the share of the royalty stream being sold. Each listing will state the investment term for the royalty stream at auction.
Royalties are generally paid on a quarterly or biannual basis. Payments will either come directly from the royalty paying entity or from Royalty Exchange, if we administer the payments on your behalf. You will receive your first royalty payment in the first distribution period after the reassignment of the stream.
The first step to participating in our auctions is to create an account, which can be done by filling out our registration form. You may then individually register for each auction that you're interested in. If it’s your first time registering for an auction, a member of the Royalty Exchange team will call to verify you as an investor.
Once verified, you can place a bid simply by entering a bid amount and clicking "Place Bid." Our auction system will keep track of all bids in real time and notify you if you have been outbid. Unverified bidders are not allowed to bid during the last hour of an auction, so please make sure you are verified early!
A starting price is the lowest price the seller will accept in an auction. Initially, an auction will be listed in “awaiting opening bid” status until a verified bidder places a bid at or above the starting price. Once the starting price is met, the auction clock will begin. Most auctions will run for less than one week.
Yes, you may enter a bid higher than the minimum bid amount (a “proxy” bid) by entering that amount in the bidding field. As other bidders place bids the system will automatically bid on your behalf, one bidding increment at a time, until your proxy bid is reached. If your proxy bid is the same as another bidder’s, the earlier-placed bid wins. You may change your proxy bid amount at any time by entering a new amount in the bidding field.
Royalty Exchange uses a five-minute rule for auctions, where if a bid is placed in the final five minutes of an auction, the clock will automatically reset to five minutes. There is no limit to the number of times the clock can be reset, so we recommend that bidders check back often as an auction nears closing time. When the auction has officially come to a close, the listing will indicate that the auction is closed.
Royalty Exchange makes every effort to ensure system availability, but is not responsible for incomplete, failed, garbled, scrambled, delayed or misdirected computer transmissions due to technical computer hardware or software failures or other errors of any kind.
If you are the winning bidder, Royalty Exchange will send you an invoice for the closing funds. Buyers are obligated to wire closing funds to Royalty Exchange within two business days of winning an auction, and we’ll hold the funds until the royalty distributor confirms the transfer.
The answer to this question depends on the purchase. An investor who owns only the rights to the royalty revenue generated by an asset and does not own the asset itself (i.e. the underlying copyright), or the right to license the asset, will not be able to license the asset for further use. However, full ownership of an asset will occasionally be posted for auction, in which case an investor may license the asset as desired.
Royalty Exchange does not give tax advice, but we expect that the income generated by royalty payments will be considered ordinary income for federal income tax purposes. Tax matters are quite complex, and investors should consult with their tax advisers.
Royalty Exchange verifies the ownership of each asset with both its current owner and the organization responsible for collecting and dispersing the royalties it generates.
No, in order to bid on an auction, you just need to be independently verified by Royalty Exchange. Once verified, you may bid freely on any of the auctions listed in the marketplace.
Yes, non-U.S. citizens may invest in royalty streams listed on Royalty Exchange. However, please consult your financial or tax advisor to determine the tax implications of receiving U.S.-based income.