Most comic book creators and publishers are aware of the impact crowdfunding has made in the industry over the past few years. Few creators are aware of the legal issues they need to consider when planning a crowdfunding campaign. As a comic book attorney who has represented several crowdfunding creators, I’d like to offer some thoughts on the best practices for comic book crowdfunding.

Crowdfunding as Distribution

Despite the concept that Kickstarter rewards are not guaranteed, many comic creators treat crowdfunding as a contingent distribution method, meaning that the book will be published if the funding goal is achieved. While established publishers use the platform to offset costs and create marketing buzz, emerging and small press publishers are using platforms like Kickstarter to bypass the perceived gatekeepers of traditional publishing to bring their stories directly to their readers.

From a legal standpoint, this means crowdfunding needs to be treated as a variant of the independent comic book publishing process. There are some nuances unique to crowdfunded comics, but I’ve tried to list the major legal considerations below.

Legal Checklist for Comic Crowdfunding

1.      Ownership of the underlying intellectual property. The story, characters, and logo of the crowdfunded comic represent IP (copyrights & trademarks) that will probably be owned by some member or members of the crowdfunding team. Since that IP has the potential to be far more valuable than the initial crowdfunding campaign, whoever plans to claim ownership needs to protect their interests by completing the proper IP registrations, securing the rights to all the work done on the book with contracts, and strive to maintain ownership of the IP after the book is printed.

2.      Investment. Crowdfunding can generate substantial revenue for a comic book project, but there are business and creative upfront costs that someone needs to pay for before the campaign launches. Who pays that money, how they get their money back (recoupment), and what happens to that investment if the campaign fails all need to be understood by the entire crowdfunding team and established in a contract.

3.      Business formation: The creation of a legal structure can provide significant liability protection and tax benefits to anyone publishing comics, including crowdfunding creators. Consider starting a company to manage the financial and intellectual property assets of your campaign.

4.      Project Management. Crowdfunding involves a lot of work on both the business and creative sides. The role of everyone one involved, from managing the social media for the campaign, to producing the comic, to printing and fulfillment should have both their role and their compensation spelled out in a written contract.  

5.      Talent Acquisition: Running a campaign is easier if you don’t do everything yourself, but the responsibility of everyone involved, their relationship to the IP, and what they’re being paid needs to be clear, whether the campaign succeeds or not.  This can range from a collaboration agreement, a work for hire agreement, or a services agreement, but the contracts should be in place before the campaign goes live.

6.      Printing and fulfillment: If the campaign is successful, you’ll need to have a plan in place to deliver the rewards to your backers. Many services have emerged to offer this service if you don’t want to have a packing party, and each one should have its own terms and conditions available for review. It is always best to look these over on your own or with your attorney to ensure you’re getting what you’re paying for.

7.      Post campaign sales: A crowdfunding campaign can provide a great platform for an emerging creator to make a splash with their target market, but the end of the thirty-day campaign doesn’t have to be the end of your distribution efforts. Whether you sell comics on your website, through the direct market, or digital distribution it always pays to review those terms of service to ensure each platform is a good fit for your book.

8.      Revenue distribution: When the money arrives, you need to know where it is supposed to go. Outstanding payments to creatives and vendors need to be made and taxes may need to be paid. After the dust settles, any funds leftover (either from the campaign itself or the ongoing sales) can be distributed to the IP owners, collaborators, or anyone else who is entitled to a bonus for a successful campaign.

These eight steps do not offer a guarantee for a comic book crowdfunding campaign will go well, but they can put a comic creator in a better position to succeed, especially if the book reaches its funding goal.

Have fun with your comic.

Gamal

If you have questions about the business or legal aspects of your comic book publishing and you'd like a free consultation, please contact me and we can set something up that fits in with your schedule.

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE AN ISSUE WITH YOUR COMIC PROPERTY, DISCUSS IT WITH A QUALIFIED CONTRACT ATTORNEY OR CONTACT C3 FOR A FREE CONSULTATION