Have you ever lost your company, your name, or your creative soul to a corporate animal?
Every day virgin designers are being taken over by corporate animals. I've seen so many designers/creators lose their companies, their ideas, their names, and more importantly--their creative soul--to big corporations because they didn't properly protect themselves. Entering into a new business deal with a big corporation is like entering into a new relationship-two parties taking a risk without really knowing each other. In the beginning, it's exciting and wonderful when both parties need each other and the relationship is amicable; however, once a change of vision or something else unforeseen happens, and parties are in a combat mode, it becomes impossible to fix and protect anyone or anything. At this point, the designers lose because they didn't know any better in order to prevent the outcome.
With a little shift in business perspective, up-and-coming designers don't have to be pillaged and devoured. In fact, corporate animals can become tamed lions and virgin designers can hold onto their knickers a little longer by employing a few "pre-nuptial" rules. I've discovered that most virgin designers find themselves in a creative haze when it comes to discussing the financial end of their creative vision. The truth of the matter is that big corporations are not there to protect you. They tend to forget about the importance of the heart of the company, which of course is your creation. To avoid financial vulnerability, talented and motivated designers need to incorporate a newmindset of how to approach business. Three rules from my Ten Kenmandments are a good place start before venturing into a long-term business commitment. From there, bigger financial quandaries can be more effectively managed.
Rule #2: Believe in your own instincts.
As much as you may be in a creative haze, you most likely have intuitive vibes on a given deal, and those inner bells going off should definitely make you think twice.
Rule #4: You shall question until you understand.
There is no shame in asking someone to clarify every point of a deal. The shame will happen when you find yourself knee-deep in a deal that leaves you high and dry in compensation for your creative contribution.
Rule #5: Surround yourself with people that complement your skills and knowledge.
This is self-explanatory: There is no way you can know everything!
Embracing a new mindset also includes designers starting to consider themselves as Intellectual Property beyond their designs. For example, your trademark or a copyright of a particular print is IP. You need to place them in a separate legal entity, such as a LLC, as early on a possible. If you decide to place the IP into a legal entity later when it has some economic value, there could be a tax liability to you and/or to the entity that owns it. If the plan is to have your IP as part of your deal, you should protect yourself in case the deal goes south in the future. One way to do this is to negotiate the deal in a way that your IP stays with you and not with your company. You can initially lend, or license, your IP to your new business partner at a nominal fee. If this partner later wants to "break up" and asks you to leave the relationship, your IP must go with you and the partner will lose his rights to the name. Another way is to make a deal where if and when your new partner defaults on his obligation to you, the IP reverts back to you and you can maintain a security interest in it.
There are other numerous variations on how to protect your creative affairs. The purpose of utilizing the Kenmandments listed above is to lay the mental groundwork for virgin designers/creators so that they can approach every endeavor with a sense of security. Though, it is also imperative designers/creators have a businessperson on their side, listening very carefully to any and all business nuances that one may not fully understand. Having an attorney attending the negotiation is not good enough. Designers are the heart of the operation and they should always look for ways to protect themselves before signing any documents. Never be impulsive and rush to sign documents, no matter how good the deal looks. Slow down and think - go back to the Kenmandments - and draw upon the people with whom you entrusted yourself.