Royalty Flow Launches IPO, Offering Fans a Slice of Eminem Royalties
11/27/2017 by Billboard Staff
Eminem performs at Samsung Galaxy stage during 2014 Lollapalooza Day One at Grant Park on Aug. 1, 2014 in Chicago.
Royalty Flow has launched its IPO. The company, a subsidiary of Royalty Exchange, is looking to raise between $11 million and $50 million via a Regulation A+ crowdfunding effort that, if successful, will result in the purchase of a portion of the income stream derived from Eminem's music.
As previously reported, Royalty Flow has the option to buy either 15 percent or 25 percent of an Eminem income stream based on royalties paid to FBT Productions from the artist’s studio albums released between 1999 and 2013. That includes albums such as The Marshall Mathers LP and The Eminem Show.
The plan is to give fans and investors a way to share in the income from the royalties through dividends paid by the company. The minimum investment during the IPO is $2,250 for 300 shares (at $7.50 a share). After the equity campaign is over, Royalty Flow intends to list directly to NASDAQ and give latecomers a chance to invest in Royalty Flow stock through the public exchange.
Regulation A+, created by the JOBS Act under President Obama, allows anyone to provide funding to startups in return for equity.
"For investors, Royalty Flow provides access to an asset class historically limited only to a handful of professional and institutional investors," the company said. "Music royalties hold great potential by virtue of their being uncorrelated with the stock market, paid out on an established and regular basis, and especially today, given the new bull market in music."
Royalty Flow previously stated that it intends to acquire and hold royalties from artists other than Eminem, though no other master recordings have been announced. The company said that it will consider investments in publishing catalogs in the future.
Eminem's label, Interscope, noted in September that the artist has no connection to FBT or Royalty Flow's plans and was not consulted.
The specific business conducted by Royalty Flow is to remain separate from parent Royalty Exchange, which is an auction platform that allows investors to bid and buy an asset with one winning bid in the end.