How the Money and the Company Work

The plain-English version of the structure. Companion to FOUNDER_BRIEF.md.

Working draft. Any dollar figures below are illustrative placeholders to show the shape, not forecasts — and they still need a refresh (see the note at the end). Not legal or financial advice.

1. One company, two faces

OPEN PANEL is one for-profit company: OPEN PANEL, Inc., a Delaware Public Benefit Corporation (we call it “the PBC”). It has two faces:

OPEN PANEL — the free side. Owns the comics and the worlds, runs the free reader, employs everyone.
VARIANT — the commercial side (a division of the same company, possibly a wholly-owned subsidiary later if we want a liability firewall). It turns the worlds into money.

Because they’re the same company, money VARIANT earns is simply the company’s money. There’s no wall to move it across, no separate owners, no internal licensing paperwork.

2. Why a PBC and not a charity (this is the important part)

An earlier version of this plan made OPEN PANEL a 501(c)(3) nonprofit that owned the IP, with a separate for-profit sister company. It looked clever, but it was the wrong fit, and here’s the plain reason:

Inside a nonprofit, the founders legally cannot share in the profits. US tax law (the rules against “private inurement”) forbids insiders from benefiting from a charity’s earnings. To get our upside we’d have had to bolt on a second company, an arm’s-length license between the two, an independent board we don’t control, and constant tax monitoring — a lot of machinery, just to buy tax-deductible donations we don’t actually need.

A Public Benefit Corporation fixes this. It’s a normal for-profit company — we own stock, we keep control, we share in the profit — that also carries a binding public mission in its charter. So we get:

The mission and the “public library” credibility (free comics, advancing literacy) baked in and legally protected.
The normal for-profit upside — founder equity, options, profit — with none of the charity restrictions.
A cleaner tax story: giving comics away free is just an ordinary business expense (marketing / top-of-funnel), not a charitable program we have to account for specially.

The nonprofit version isn’t gone — it’s kept on the shelf as a fallback, to be used only if donations and grants ever become a real funding pillar. There’s also an optional small charity we could add later for things like getting comics into schools — but it would never own the IP. The crown jewels stay in the PBC.

3. Where the revenue comes from

All of it comes from the universe, never from charging readers. VARIANT’s streams:

Stream	Plain version
Merch licenses	We let a manufacturer make and sell official apparel, figures, prints — they pay us a royalty (a cut of sales) plus an upfront guarantee.
Partnerships	Co-branded drops and collaborations with other brands around a universe.
Film / TV / game options	A studio pays for the right to develop one of our worlds; if they make it, we get paid more, plus a cut.
VARIANT EDITIONS	Premium collectible editions we sell directly to fans (foil covers, box sets, signed). High margin.
Brand licensing	Letting others use our characters/marks on their products for a royalty.
Sublicensing	Passing along rights we hold and keeping the margin.

Every one of these traces through the Rights & Royalty Ledger — the system that records who owns what, what was licensed to whom, and who gets paid. It’s how creators get their share automatically and transparently.

4. How creators get paid

The plan (still has one open number — see DECISIONS.md):

Fair pay up front for the work, funded by the company.
Co-ownership — the creator keeps a stake in the characters they make.
A real cut of downstream licensing their work generates — the working placeholder is an author-favorable 50% of net licensing revenue attributable to their work, paid automatically through the Ledger.

This is deliberate. The comics industry’s trust benchmark is Image Comics’ creator-ownership model; we’re aiming to be on that side of the line, because the talent pipeline is the business.

5. The money map

                         READERS  ── read standard issues ──▶  ( FREE, FOREVER )
                                                                      │
                                                                      │ free reach builds
                                                                      ▼  the audience & the IP
   CREATORS ◀── fair pay up front + ──┐                    ┌────────────────────────────┐
              a share of licensing    └───── tracked by ───│   OPEN PANEL, Inc. (PBC)   │
              (via the Ledger)                the Ledger    │  owns the IP · runs free   │
                                                            │  reader · earns licensing  │
                                                            └────────────────────────────┘
                                                              │ (VARIANT = its commercial side)
                                                              ▼
                                          merch · partnerships · film/TV · editions · sublicensing
                                                              │
                                                              ▼
                                              PROFIT  ──▶  founders / employees (equity, options)
                                                       └─▶  reinvested into more & better free comics

The one invariant: reading is always free; the money is always made on the universe.

6. Rough shape of the numbers (illustrative only)

To picture the shape, not to forecast:

Making and giving away one comic issue costs us something like $9,000 (creator pay + production) plus a fraction of a cent per reader to deliver. Cheap shots on goal.
A premium collectible edition might sell around $40 with a healthy margin after print and fulfillment.
The payoff is asymmetric: thousands of cheap free issues, and the few that catch fire become licensable universes worth far more than the whole program cost.

Honest caveat: the detailed financial model in business/BUSINESS_MODEL.md was written for the old nonprofit structure (two separate companies, royalties flowing “up” to a charity, UBIT tax lines). Under the current PBC plan there’s just one company, so those two-entity P&L tables need to be rebuilt. Treat the numbers above as directional until we refresh that doc.

Back to FOUNDER_BRIEF.md · open questions in DECISIONS.md.