How much can I get for my royalties?
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.
What types of royalties can I sell?
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.
Can I sell just a portion of my royalty revenue?
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.
How quickly can I sell my royalties?
Once we sign a listing agreement with you, we can usually create your listing in less than two weeks.
What documentation do I need to provide in order to sell?
To list your royalty stream on Royalty Exchange, you will need to provide us with the following information:
- What you'd like to sell (e.g., for music: songwriter’s share of performance royalties, mechanical royalties, synchronization royalties, digital download royalties)
- Who distributes your royalty payments, and any contracts related to your royalties
- 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.)
After we review your data and verify your royalty stream, we will discuss the following questions:
- What are your funding needs?
- 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, or starting price, is the minimum amount 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.)
Who sets the starting price and minimum bid amount?
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.
When will I receive the proceeds from my sale?
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.
What fees can I expect if I sell my royalties through Royalty Exchange?
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.
How can I get started?
It's simple -- our process begins with a short consultation call to understand your fundraising desires. We'll then help you put together a plan to raise the money you want for your next project or big purchase. You can request your free consultation call by clicking here and filling out the short form. We'll be in touch after you fill out that form.
What are royalties?
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.
What am I buying?
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.
Do you provide revenue data for each royalty stream?
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.
How long is the term of a royalty stream investment?
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.
When and how will I receive royalty payments?
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.
How do the auctions work?
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!
What is a starting price and when will the auction end?
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.
May I place a bid higher than the minimum bid amount?
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.
What happens at the end of an auction?
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.
What happens if I win an auction?
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.
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 (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.
How are royalty payments taxed?
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.
How do I verify the legitimacy and legality of a transaction?
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.
Do I have to be an accredited investor to bid on an auction?
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.
May I bid on an auction if I'm not a U.S. citizen?
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.
Can I invest in royalties with my IRA?
Yes. You can hold royalties in your IRA. The process is simple.
If you're not already with a "self directed IRA custodian", you can easily transfer your account to one. These custodians are different than the normal stock brokerages like Fidelity or Scottrade. With those, you can only invest in stocks.
A self directed IRA custodian will facilitate alternative investments, like royalties or real estate in your IRA. There are dozens of self directed IRA custodians out there (e.g., IRA Services Trust Company and Equity Trust).
It may take a week or two to get an account opened and your assets transferred to them. Once your account is transferred and you win an auction, you'll send them a direction to send the funds for payment. Please keep that in mind as you make any bids on Royalty Exchange.