Royalty Exchange is an American company that operates an online platform for buying and selling royalty assets of any type, mostly music, where royalty owners can sell their future payments to investors as alternative assets. The company hosts a centralized marketplace and online auction platform that connects a community of over 22,500+ investors with owners of royalty-based assets. All types of assets can be monetized and invested in including music royalties, film royalties, and tax credits, patent and intellectual property royalties,

trade secret Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily ...

royalties, renewable energy land leases, technology licensing royalties, book publishing royalties, franchise royalties, copyright royalties and agriculture royalties.Baverman, Laura
"Website Turns Music Royalties into Investments."
USA Today. Gannett, 09 June 2014. Web. 25 June 2014.Chupka, Kevin

Yahoo Finance. Yahoo, 14 May 2014. Web. 25 June 2014.

History

Royalty Exchange was founded in 2011 in

Raleigh, North Carolina Raleigh (; ) is the capital city of the state of North Carolina and the seat of Wake County in the United States. It is the second-most populous city in North Carolina, after Charlotte. Raleigh is the tenth-most populous city in the Southe ...

. The founding team was led by Sean Peace (tech entrepreneur and CEO), Reggie Calloway (five-time Grammy-nominated songwriter/artist) and Wilson Owens (former band manager and digital marketing expert). In October 2015, the company was acquired by a group of private investors, including new CEO Matthew Smith, and President & CFO Jeff Schneider. Additional investors include artist manager and concert promoter Bill Silva of Bill Silva Entertainment, as well as a group of alternative investment experts. The company is now based in

Denver, CO Denver () is a consolidated city and county, the capital, and most populous city of the U.S. state of Colorado. Its population was 715,522 at the 2020 census, a 19.22% increase since 2010. It is the 19th-most populous city in the United ...

. In October 2017, Royalty Exchange became a member company of Techstars Music Accelerator. On March 3, 2021, digital distributor Vydia announced that it would use Royalty Exchange's online marketplace to fund advances for its clients. On March 11, 2021, Anthony Martini was named CEO of Royalty Exchange. Former CEO Matthew Smith will remain with the company as a chairman.

Notable auctions

* Frank Churchill: The first successfully completed online auction began on July 2 and closed on July 16, 2011. It included royalties of songwriter Churchill's catalog, including songs from ''

Snow White and the Seven Dwarfs "Snow White and the Seven Dwarfs" is a 19th-century German fairy tale that is today known widely across the Western world. The Brothers Grimm published it in 1812 in the first edition of their collection ''Grimms' Fairy Tales'' and numbered as T ...

'' and ''Bambi''.Maurer, Allan
"The Royalty Exchange starts online auctions with music from Disney classics."
TechJournal. 05 July 2011. Web 18 Aug. 2014
Huffington Post, 23 June 2011. Retrieved 14 October 2014. * Kashif: Fifty percent of the R&B singer-songwriter and producer's writer share of public performance royalties, which sold for $156,000. His catalog includes the songs "

Love Come Down "Love Come Down" is a song written by American musician Kashif. It was recorded by American singer Evelyn King for her fifth album '' Get Loose'' (1982). "Love Come Down" was released in July 1982 by RCA Records as the lead single from ''Get Lo ...

" and " So Fine." * Coolio: On August 28, 2013, American rapper Coolio auctioned the performance royalties of all his songs, including the #1 single " Gangsta's Paradise". Coolio used the proceeds to advance his career as a chef. * Cheryl Cook: In July 2014, Cook auctioned all of her writer's share of public performance royalties, and accumulated royalty-produced assets from songs by

Preston Glass Preston Glass (born January 9, 1960) is an American musician, songwriter and producer. Glass is the winner of six BMI Awards. He has also worked several famous artists such as Aretha Franklin, Whitney Houston, Diana Ross, Kenny G, Natalie Cole and ...

. This asset sold for $26,000."Auction Overview"
Royalty Exchange. 2014. Web 18 Aug. 2014"The Publishers Quarterly (End of Q2 2013): Royalty Exchange Wants to Make Publishing Income Work Like Stocks & Bonds."
Billboard. BillboardBiz. 2 August 2013. Retrieved 18 August 2014 *

Barry White Barry Eugene Carter (September 12, 1944 – July 4, 2003), better known by his stage name Barry White, was an American singer and songwriter. A two-time Grammy Award winner known for his bass voice and romantic image, his greatest success came ...

: This asset sold for $73,000, consisting of 25% of Dennis Radcliffe's songwriting share of public performance royalties for the hit song “

You're the First, the Last, My Everything "You're the First, the Last, My Everything" is a song recorded by American singer and songwriter Barry White from his third studio album, '' Can't Get Enough'' (1974). The song was written by White, Tony Sepe and Peter Radcliffe and produced by W ...

.” The song was released by

in 1974. It peaked at #1 on the Billboard Hot Soul Singles chart and #2 on the

Billboard Hot 100 The ''Billboard'' Hot 100 is the music industry standard record chart in the United States for songs, published weekly by '' Billboard'' magazine. Chart rankings are based on sales (physical and digital), radio play, and online streamin ...

chart. * Tony Geiss: In June 2017, the estate of Geiss, a songwriter for the children's television series ''

Sesame Street ''Sesame Street'' is an American educational children's television series that combines live-action, sketch comedy, animation and puppetry. It is produced by Sesame Workshop (known as the Children's Television Workshop until June 2000) ...

'', auctioned his royalties for $580,000 and donated the proceeds to several charity organizations. * "

See You Again "See You Again" is a song by American rapper and singer Wiz Khalifa featuring fellow American singer Charlie Puth. It was commissioned for the soundtrack of the 2015 film ''Furious 7'' as a tribute to actor Paul Walker, who died in a single-ve ...

": In July 2017, Jake Broido, a backup singer on

Wiz Khalifa Cameron Jibril Thomaz (born September 8, 1987), better known by his stage name Wiz Khalifa, is an American rapper, singer, songwriter, and actor. He released his debut album, ''Show and Prove'', in 2006 and signed to Warner Bros. Records in 20 ...

's #1 single "See You Again", auctioned off his digital performer royalties for the United States. * King Lil G: In July 2017, MIH Entertainment put rapper King Lil G's sound recording royalties up for sale without King Lil G's knowledge. In January 2018, investor Ryan Stotland, who won the bidding for $420,000, sued Royalty Exchange for breach of contract. Stotland named Berklee College of Music professor Allen Bargfrede as an expert witness who concluded in his expert report that Royalty Exchange had acted negligently while performing due diligence on the catalog sale. On October 11, 2018, Judge Jackson denied Royalty Exchange's motion to dismiss. On March 7, 2019, Royalty Exchange paid an undisclosed amount of money to Stotland in order to settle the case out of court. * Dickie Goodman: Goodman's son Jon sold the rights to the entire Goodman library on Royalty Exchange in July 2018, netting $13,000. The elder Goodman had committed suicide in 1989, and his library of "break-in" records was drawing $1,700 a year in royalties at the time of the auction; the younger Goodman sold the library in hopes of its new owners having the connections to give the library greater exposure. *

Dave Fortman Dave Fortman (born July 11, 1967) is an American record producer and musician. He is the guitarist for rock band Ugly Kid Joe, and has worked with bands such as Superjoint Ritual, Snot, Atomship, Eyehategod, Mudvayne, Otep, Slipknot (on the ...

: In April 2020, Dave Fortman placed his production royalties for Slipknot's 2008 album ''

All Hope Is Gone ''All Hope Is Gone'' is the fourth studio album by American heavy metal band Slipknot, released on August 26, 2008 by Roadrunner Records. The album was published in two versions: the standard album in a CD case and a special edition packaged ...

'' and Simple Plan's self-titled album up for sale. * Lil Dicky: In June 2021, Royalty Exchange announced its first NFT auction, which included music publishing royalties for " Save Dat Money" by rapper Lil Dicky. * A Tribe Called Quest: In June 2021, Royalty Exchange sold 1.5% of A Tribe Called Quest's sound recording royalties from the group's first five albums as an NFT without their permission.

Ali Shaheed Muhammad Ali Shaheed Muhammad (born August 11, 1970) is an American hip hop DJ, record producer, and rapper, best known as a member of A Tribe Called Quest. With Q-Tip and Phife Dawg (and sometimes Jarobi White), the group released five studio albums ...

, one of the founding members of the group, stated that, "no member of A Tribe Called Quest has entered into any partnership with Royalty Exchange." A Tribe Called Quest previously disputed a hidden clause in their first record contract with Jive Records that had been negotiated by Ron Skoler and Ed Chalpin of PPX Enterprises, who represtened the rap group in 1989. That clause assigned a percentage of the recording fund to PPX each time the recording of a new record commenced. A Tribe Called Quest successfully sued when they learned of the clause but only after Jive Records provided support when the group committed to a recording an additional record with the label. "Apparently PPX sold their share of a settlement they made with Jive Records to an individual whom entered into a partnership with Royalty Exchange. Be clear that is the NFT that was created and auctioned," Muhammad stated. * ''

Shrek ''Shrek'' is a 2001 American computer-animated comedy film loosely based on the 1990 book of the same name by William Steig. It is the first installment in the ''Shrek'' franchise. The film was directed by Andrew Adamson and Vicky Jen ...

'': In July 2021, North Star Media acquired a portion of the royalty stream to 643 compositions from the ''

'' film franchise.

Royalty Flow

In September 2017, Royalty Exchange created a company called Royalty Flow, designed to acquire and hold royalty streams "of the world's biggest artists," starting with the Bass Brothers' production share of Eminem's 1999-2013 catalog. Royalty Flow filed with the SEC under Regulation A+ to raise between $11 million and $50 million to acquire the Eminem catalog from the producers who discovered and developed him—FBT Productions—as well as future catalogs. Those buying shares in Royalty Flow would have the right to collect dividends based on the performance of the Eminem catalog and any other catalogs acquired over time. The company intends to later list directly to the NASDAQ. Royalty Flow was officially launched on November 27, 2017. On April 9, 2018, Royalty Exchange CEO Matt Smith canceled the IPO. He confirmed that the Nasdaq Stock Market revoked the company's conditional approval for listing on the exchange. The Bass Brothers' stake has since been acquired by Shamrock Holdings.

Private Syndicates

In June 2018, Royalty Exchange began offering Private Syndicate investments. Under Private Syndicates, Royalty Exchange creates Special Purpose Vehicles (SPV) designed to hold music catalogs. Accredited investors then buy shares of that entity, which grants them a proportional share of the royalty income it generates. Unlike auctions, there is no bidding. Investors can buy units in the Private Syndicate at fixed, known prices, and take the position size of their choice in each. The first Private Syndicate closed was for the co-publishing share of

Cage The Elephant Cage the Elephant is an American rock band formed in 2006 in Bowling Green, Kentucky. They moved to England, U.K. and settled in London in 2008, shortly before their self-titled first album was released. The band currently consists of Matt S ...

's catalog. The second Private Syndicate, which was announced in September 2018, involved the royalties to British rock band Dire Straits. This catalogue had earned nearly $300,000 in the twelve months before the auction.

Multi-unit auctions

On August 7, 2014, Royalty Exchange had its multi-unit auction, a type of auction where the asset is securitized or divided into multiple units allowing for numerous buyers to bid on and win small or large amounts of the asset. The auction consisted of producer royalties for 11 tracks recorded and performed by the alternative rock band, 3 Doors Down."Auction Overview"
Auctions. Royalty Exchange. 2014. Retrieved 18 August 2014

Acquisition and funding

In October 2015, the business was acquired and relocated to Denver, Colorado. As part of the acquisition, a new marketing/sales, legal, and operations team were put in place. In June 2017, the company raised $6.4 million in funding through a convertible note offering, more than double the $3 million it initially sought. The new funds were earmarked for new hires, new technology, and new product development.

References

External links

* {{official, http://www.royaltyexchange.com/ Financial services companies established in 2011 Intellectual property organizations Investment companies of the United States Online auction websites of the United States