Frequently Asked Questions
Visit our Learn section 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.
Royalty Exchange will always distribute royalties quarterly — the only exception to this is when a stream generates bi-annual royalties, in which case royalties will be distributed every other quarter. Payments will be made via Paypal on the first week following the end of each calendar quarter.
All bids are binding and must be placed before an auction closes. If you wish to place a bid through a medium other than the website, please contact us at Auctions@RoyaltyExchange.com to discuss alternatives.
To learn more about our Multi-Unit auctions in particular, check out our video about bidding and strategies.
A single-unit auction is an auction where only one investment asset is made available. Buyers can place bids only for the whole asset in its entirety, and there can be only one auction winner. Winning bids are binding legal contracts with the seller of the royalty stream. For additional information, check out What is a Single-Unit Auction?
Bids on Multi-Unit auctions are placed by the unit, each unit having a price that is determined by the auction’s current bids. Your offer amount (units bid for * closing unit price) may be accepted by Royalty Exchange at closing and only after your accredited investor status has been verified.
Looking for more information on Multi-Unit auctions? Watch our video explanation or try our live auction demo.
The “Make An Offer” feature applies to both Multi-Unit auctions and Single-Unit auctions equally. It is a way for a bidder to make a full-price offer only. No partial offers for fractional interest will be accepted. Offers should be at, or above, the auction’s current price. Once an offer is submitted and reviewed it will be presented to the auction’s other current bidders, giving them a chance to counter the offer. Only investors who have placed an active bid in the auction will have the opportunity to counter. If there are no counter offers, the offer will be submitted to the seller for final acceptance.
The auction will continue until a price has been agreed upon by both parties.
Offers are not considered valid until accepted by Royalty Exchange and the company has the right to refuse any offer.
- Royalty Exchange makes every effort to ensure system availability. However, we reserve the right to (in rare cases) close an auction prior to, or extend it beyond, the posted closing time. This may be done at our discretion and without warning.
- Royalty Exchange 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.
MAY I LICENSE AN ASSET ONCE I PURCHASE ITS ROYALTY STREAM?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, or the rights 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.
The Target IRR is calculated using Microsoft Excel’s XIRR formula.
The IRR(Internal Rate of Return) is calculated using the starting price and current degradation percentage (calculated based upon the most recent royalty income data available) as default values. The degradation percentage will vary over time and may increase. Scenarios created using the auction page IRR calculator should not be construed as any guarantee of future returns. The results of an investment in this offering may vary substantially from such scenarios and could include negative returns or the complete loss of your investment principal.
Our “Multi-unit” auctions are security investments. They are categorized this way because we are breaking up the asset-backed security into units allowing many people to buy-in to the same investment.Limited-Term Investments
These are royalty investments, that can include tax credits/rebates, that have time-range targets from 12 months to 30 years.
These are shorter-term royalty investments that have time-range targets from 12 months to 12 years and have a fixed payout amount. The royalty stream will payout until it reaches the fixed payout amount regardless of how short or long it takes. The time-range is the expected time to payout, but the length of time may vary.
These are generally longer-term investments that have no fixed payout amount with some investments having a virtual indefinite ownership period. Music royalties for example can last well beyond 35 years depending on when the song was created, also some energy royalties can continue on if there is a “deeded” interest in the property hosting the energy producing agent.
Investment terms listed with an approximation symbol ~ , indicate a target length of time needed for the royalties to reach the indicated payout amount (This is just an estimate and could take longer or shorter).
Investment lengths listed with a plus symbol + after the number, such as 35+ years, indicate an investment term of at least 35 years with an uncertain number of years of ownership after that.
- What you’d like to sell
- e.g., for music: songwriter’s share of performance royalties, mechanical royalties, production royalties
- The person or entity distributing your royalty payments
- AT LEAST three years of royalty statements
- Digital statements in CSV/Excel format are preferred, as this allows us to provide a more sophisticated analysis of your royalty stream
- What percentage of your royalty stream do you want to sell?
- Streams can also be divided by other criteria, such as by song or by licensor.
- Do you want to use a reserve price?
- A reserve price is the minimum price you would accept for a sale on our marketplace. If this price isn’t met, there is no sale.
- How can we best promote your auction?
- Royalty Exchange handles most of the promotion for auctions, but any outlets that you can provide us will increase the probability of your item selling. Some examples include social media accounts, websites and personal industry networks.