Legal organization and entrepreneurial structuring of influencer start-ups and personal brands

Introduction: Business model of influencer start-ups

Influencer start-ups have established themselves as an independent business model in recent years. An influencer startup is a young company that builds on the reach and brand of one or more internet personalities – the influencers – and uses them commercially. At its core, the model is based on converting the influencer’s large following on social media into revenue, for example through advertising, product placements or the sale of own products. These start-ups therefore combine elements of traditional media companies, advertising agencies and personal brand management.

The focus of an influencer startup can be diverse: Some focus on content production (e.g. regular videos, blog posts, streams), others on e-commerce (merchandising, own product lines) or cross-platform marketing. Typically, however, the focus is on the influencer as a person – his/her personality, popularity and authenticity are the company’s assets. A separate company is often founded for this purpose (e.g. a GmbH or UG in Germany), through which contracts with advertising partners, agencies and platforms are processed. This allows the personal brand to be cast in an entrepreneurial structure that is scalable and attractive to investors. However, this poses particular legal challenges for the startup because the brand is closely tied to the person (more on this below).

An influencer startup must think in an interdisciplinary way: in addition to creative content and marketing, legal issues such as contract design, compliance with advertising law, data protection and brand development must be considered from the outset. For example, the labeling of advertising is an early issue, as violations here can result in warnings or fines. The right legal form and structure (such as setting up a corporation to limit personal liability and drawing up clear contracts between the influencer and the company) are also part of the strategic planning.

In summary, influencer start-ups are companies whose business model is based on the commercialization of their own reach in social media. They combine creative work with professional personal brand management and require a sophisticated legal foundation in order to be able to operate successfully and with legal certainty in the long term. In the following sections, the individual aspects – from the definition of the personal brand and monetization models to the drafting of contracts and approaching investors – are examined in detail from a legal perspective.

Personal brands as a business model: definition and legal classification

The term personal brand refers to the fact that a person themselves – with their identity, reputation and public perception – becomes a brand. In the context of influencers, this means that the focus is not on a detached product, but that the personality of the influencer is the figurehead and guarantor of the company’s values. The content and values of such a business model are therefore essentially based on the presence and authenticity of a single person.

From a legal perspective, a personal brand is an intangible asset that affects various areas of protection: Firstly, the right to a name (Section 12 BGB), as the name or stage name of the influencer is usually used. § Section 12 BGB protects the bearer of the name from unauthorized use or usurpation of their name. In the case of well-known influencers, the stage name can therefore act as a company trademark – third parties may not use it in the course of business without further ado if there is a risk of confusion. On the other hand, trademark law applies if the influencer has registered their name or a logo as a trademark. A registered trademark offers comprehensive protection and exclusive rights of use for certain goods/services. Many influencers protect their stage name by registering it with the DPMA/EUIPO in order to prevent imitators and expand their personal brand.

From a business perspective, the personal brand is often incorporated into a legal entity. For example, influencers set up a sole proprietorship or corporation to which they transfer certain exploitation rights. This allows contracts with advertising partners etc. to be processed via the company, while the influencer themselves act as a figurehead. The contractual structure is important: the influencer (as a natural person) and their own company should make clear agreements, for example on the use of likeness, name and content, in order to prevent later conflicts. License agreements play a role here (see section Contractual design), with which the company’s personal brand can be used.

Another aspect of the legal classification is that personal brands must be identified as such in advertising. If an influencer promotes their own brand (e.g. their own fashion label), the question arises as to whether this must be labeled as advertising. According to the Federal Court of Justice, an influencer who presents products and at the same time promotes their own image is in any case acting “commercially”. This means that self-promotion can also trigger labeling obligations if there is a commercial intention behind it. The legal situation was clarified in 2022 with the new Section 5a (4) UWG (the so-called “Influencer Act”): No labeling is required if there is no consideration from a third-party company. However, the BGH has clarified that mere gratuitousness is not sufficient – anyone who promotes their own commercial purpose is also acting commercially. This means that the personal brand as a business model falls under advertising law as soon as it is used to promote one’s own or third-party companies.

As a business model, the personal brand requires conscious brand development (personal branding). Values, messages and recognizability of the person are developed strategically, similar to product brands. From a legal perspective, it is important to ensure protection at an early stage: e.g. domain protection, trademark registration in relevant classes (such as class 41 for entertainment services, 35 for merchandising), and contracts with partners who use the personal brand (licensing conditions, clear regulations on content and limits of use). The personal brand also interacts closely with personal rights – the influencer as a person has rights to their own image (Section 22 KUG) and to their voice/biography. Any commercial exploitation of these elements must be in line with personal rights, which requires particular sensitivity (see section 10 on moral tensions).

Overall, the personal brand is legally a hybrid construct: it is both a marketing strategy and a legal object. For founders, this means that they have to set up their persona under trademark law and contractually in such a way that it becomes a resilient business model that can be contractually transferred or licensed without infringing inalienable personal rights. This balancing act shapes all subsequent topics – from monetization and liability to approaching investors.

Monetization models for influencers and personal brands

The question of how influencers actually earn money is central to the business model. Various monetization models have been established, which are often used in parallel:

a) Collaborations and sponsored content: The most common source of income are collaborations with companies in which the influencer presents products or services in their posts, videos or streams. Influencers either receive a flat fee or are paid based on success (affiliate links, commissions). Legally, these are advertising contracts or service contracts that oblige the influencer to publish content in return for payment. It is important to clearly label them as advertising in order to avoid surreptitious advertising. Under German law, there is a labeling obligation if the influencer receives a consideration for the product mention. The content must be marked in such a way that the advertising character is recognizable at first glance (e.g. “Advertisement” or use the platform function “Paid partnership with…”). Platform T&Cs support this: Instagram, for example, prohibits veiled advertising and provides tools to tag partners】. Contracts for sponsored content should regulate, among other things: Content and frequency of posts, approval loops, duration of posts (how long online), exclusivity (e.g. no competitor products advertised during the campaign) and liability issues (who is liable for any legal violations in the content).

b) Digital products and own content: Many influencers market their own digital products. Examples include e-books, online courses, presets/filters, pieces of music or exclusive communities (Telegram groups, Discord). Another prominent model is the sale of subscriptions for exclusive content via platforms such as Patreon, Steady or OnlyFans. OnlyFans allows creators to give paying subscribers access to exclusive photos/videos for a monthly fee – often in the adult entertainment sector. Legally, usage contracts with end customers and the platform terms and conditions are relevant here. Influencers must comply with consumer protection regulations when selling directly to consumers (imprint obligation, right of withdrawal for digital content – whereby the latter can expire in the case of fully fulfilled digital services, Art. 16 lit. m EU Consumer Rights Directive). With OnlyFans & Co, the platform usually acts as an intermediary: the influencer concludes a contract with the platform, which in turn processes the subscriptions and pays out a share of the revenue. The platform T&Cs regarding permissible content are important here (e.g. OnlyFans explicitly prohibits content with minors or non-consensual depictions) as well as tax issues: Income is taxable; platforms such as OnlyFans are often based abroad (UK), but German creators must nevertheless observe VAT, for example (possibly reverse charge or use of special regulations for electronic services).

c) Merchandise and physical products: Successful personal brands often expand into merchandising – the influencer launches their own fashion collections, cosmetic lines, nutritional supplements or other products. This can be done either independently (own brand) or in cooperation with manufacturers. Legally, this usually requires license agreements: the influencer makes their name, logo or slogan available as a brand, a manufacturer produces and distributes the goods and pays license fees. Alternatively, the influencer sets up a production company or an online store themselves and sells in their own name. Extensive legal obligations then apply here: Product liability, warranty, labeling obligations (such as the Cosmetics Regulation, food law if supplements), and again consumer rights in online trading (imprint according to Section 5 DDG, GDPR notices, right of withdrawal, etc.). An example: A fitness influencer sells their own protein powder – as the distributor, they must then bear responsibility under food law and ensure that advertising for the product complies with the health claim requirements. It is therefore often common for influencers to cooperate with existing companies (white label products) in order to outsource these risks.

d) Live events and appearances: Some influencers monetize their brand through events – e.g. meet-and-greets, tours, conferences or paid appearances as a speaker/moderator. Classic service contracts are concluded here: the influencer appears for a fee. In addition, ticket sales can generate direct revenue if the influencer is the event organizer. In terms of contract law, the following points must be clarified: performance conditions, possible cancellations (illness, etc.), rights of use to photos/videos of the event and liability issues (e.g. if the influencer’s personal rights are violated by fans or vice versa). When influencers take part in TV shows or formats, they often conclude so-called artist contracts, which also regulate fees and permitted exploitation.

e) Platform monetization: Many social media platforms offer their own remuneration models. Examples: YouTube Partner Program (share of ad revenue before videos), TikTok Creator Fund, Twitch with subscriptions and bits (tips), Instagram Bonuses or Facebook In-Stream Ads. This income is usually defined by the platform T&Cs – influencers agree to platforms placing ads and pay out a fixed share. It is relevant here that influencers comply with the community guidelines and partner terms and conditions, as violations (such as copyright infringements, hate speech, etc.) can lead to demonetization or blocking. This source is often volatile for the business model, as it depends on algorithms and platform decisions. From a legal perspective, disputes here are rarely settled directly in court, as the contracts provide for arbitration bodies (e.g. YouTube has an internal complaints system) or jurisdictions abroad. Nevertheless, this income is part of the tax assessment basis and must be accounted for/taxed by the influencer startup.

f) Premium and adult content (OnlyFans, Patreon): A special area is erotic or sexual content on platforms such as OnlyFans. Here, some influencers generate enormous revenues through revealing content offers behind paywalls. The law is strict here: only adults may participate as creators and subscribers; platforms require age verification. Content that is pornographic can have criminal relevance if it violates Section 184 of the German Criminal Code (StGB) (distribution of pornographic material) – however, Section 184d StGB allows distribution to adults under certain conditions. Influencers who offer such content are operating in a legally sensitive area where the protection of minors and privacy play a major role (see section 10). Platforms such as OnlyFans stipulate that all recognizable persons in the content must have given their consent and be of legal age; any violation will result in an immediate ban. For the startup, there is also the question of reputation: investors may be reluctant to invest in business models based on erotic content due to regulatory and moral risks. Nevertheless, it is a legitimate monetization model that should not be excluded here.

In conclusion, it can be said that influencers usually monetize in multiple ways – for example, a mixture of advertising for third-party products and building their own product lines. Each source of income entails specific contractual forms and legal requirements that an influencer startup must observe. The trick is to combine these models in such a way that legal conflicts are avoided – e.g. exclusivity clauses from advertising contracts could collide with your own product advertising. Careful contract management is required here.

Legal responsibility & liability in the influencer business

Influencers and their start-ups operate in a complex legal network of responsibilities. On the one hand, they bear responsibility towards consumers and the public (compliance with laws, no misleading information, etc.), and on the other hand, they are liable to business partners for contractual obligations. Important aspects of liability are

a) Provider identification and imprint obligation: Influencers who operate online presences for business purposes are subject to the imprint obligation in accordance with Section 5 of the new Digital Services Act (DDG), which has replaced the Telemedia Act. This means that every social media channel that is not purely private must provide an easily recognizable legal notice with the name, address and contact details of the provider. Many influencers use Linktree or story highlights to link their legal notice. A violation can be punished as an administrative offense and result in warnings. Among other things, the DDG implements the EU requirements from the Digital Services Act (DSA) and strengthens transparency obligations. Tip: Influencer start-ups should clarify at an early stage who is acting as the provider – it often makes sense for the established company to appear in the legal notice (instead of the private individual) in order to focus liability on the legal entity.

b) Advertising labeling and UWG: As mentioned in section 3, influencers must clearly label advertising as such. If this is not the case, there is a risk of warnings from competitors or associations due to unfair competition (Sections 5a VI, 3 UWG) or proceedings by the media supervisory authority due to concealment. The German media authorities classify a lack of labeling as surreptitious advertising, which is inadmissible under the German Interstate Media Treaty (MStV). Since the BGH rulings of September 2021 (influencer cases “Luisa-Maximilian”, “Flying Uwe” etc.), it has been clear: as soon as there is a consideration, labeling is mandatory. But even without consideration, labeling may be necessary if the post is objectively promotionally exaggerated. Influencer start-ups are liable in two ways here: the influencer is liable for their posts (often as the perpetrator of the infringement), but the management or agency can also be liable as a contributor or participant if they are involved in the publication. Internal guidelines are therefore essential to check every post for legal compliance. The newer EU rules (DSA) also require platforms to provide tools to flag paid posts and users to report illegal content. Influencers must therefore expect stricter platform checks.

c) Criminal law risks: In principle, no different criminal laws apply to influencers than to other citizens – but their public activities harbor special risks. Cases of insult or defamation (Sections 185 et seq. StGB) are conceivable, for example, if an influencer disparages third parties in a “diss track” or video. Content that is harmful to minors (Section 184 StGB ff. for pornography, Section 130 StGB incitement to hatred, etc.) can also become relevant, especially in the case of controversial pranks or political content. Influencers are personally liable for criminal offenses committed by them; the startup as a company may be subject to fines under the OWiG or (in future) under the Verbandsanktionengesetz (Association Sanctions Act) if managers commit criminal offenses in the interests of the company. Violations of the Art Copyright Act (publication of images without consent) or copyright infringements (e.g. use of protected music without a license) can also result in criminal charges. An influencer startup must therefore implement compliance rules to minimize criminal risks – e.g. no use of copyrighted content without permission, careful handling of statements about third parties, youth protection filters for certain content, etc.

d) Platform responsibility and liability of intermediary platforms: Large platforms such as YouTube, Instagram or TikTok are not (yet) liable for user content under the DSA and the E-Commerce Directive as long as they have no knowledge of legal infringements and delete them quickly after notification (notice-and-takedown principle). However, influencers themselves are content creators and are therefore directly responsible for legal violations in their posts. What is new is that the Digital Services Act also makes influencers responsible as supporters of commercial communication: they must ensure that their content is not illegal or misleading. Platforms must provide reporting mechanisms that can be used to report offensive or illegal influencer posts, for example. For influencer start-ups, this means that they must expect their content to be removed more quickly if it violates the law – which in turn can lead to a loss of revenue (demonetization). At the same time, the platform T&Cs usually have liability exemptions: Influencers must indemnify the platform operator if a claim is made against the latter due to the influencer content. This means that if, for example, an influencer video uses music in breach of copyright and YouTube is liable for this, YouTube could take recourse against the influencer. You should be aware of these contractual indemnification clauses in the platform T&Cs and minimize the risk as far as possible by clearing your rights before publication.

e) Liability towards end consumers: An interesting question is whether influencers are liable for damages suffered by followers as a result of their recommendations. Example: An influencer promotes a certain financial product or a health-related life hack and a follower suffers damage. In principle, the influencer is not liable in the same way as a salesperson or consultant, as there is no direct contract with the follower. Liability in tort would only come into consideration in the event of a breach of absolute rights (life, health, property) and intent or negligence. For example, if false health promises are made, tortious liability could arise due to § Section 823 (2) BGB in conjunction with the Therapeutic Products Advertising Act conceivable – but in practice, such cases are rare. In France, however, it was regulated in 2023 that influencers are subject to strict advertising restrictions for certain industries (e.g. financial products, medical interventions). Violations there can also have consequences under civil law. In Germany, one could think of liability for misleading advertising under the Unfair Competition Act (UWG), but this is primarily asserted by competitors, not by consumers directly. However, if an influencer advertises their own product (e.g. cosmetics) and consumers suffer damage due to a defective product, the influencer’s company is liable under product liability and warranty. If the influencer himself is a manufacturer or importer, he may even be liable under the Product Liability Act regardless of fault.

f) Contractual liability towards partners: Influencer start-ups enter into many contracts – with advertisers, agencies, platforms, service providers. The fulfillment of these contracts creates liability risks in the event of poor performance or non-fulfillment. Example: An influencer undertakes in an advertising contract to make five Instagram posts, but fails to do so or posts late. The contractual partner can claim damages or assert contractual penalties, if agreed. Contracts should therefore contain realistic obligations and, if necessary, limitations of liability (e.g. limitation to direct damages, exclusion of consequential damages) to reduce the risk. Conversely, the influencer also wants to be protected against liability if, for example, the advertised product has defects – influencers often demand a clause stating that the client is responsible for the legality of the content and product information provided and indemnifies the influencer against third-party claims. This can prevent the influencer from being liable for false advertising claims made by the manufacturer.

In summary, the influencer business requires all-round compliance: starting with the imprint obligation and advertising law through to criminal law and contract fulfillment, influencer start-ups must ensure that they meet their responsibilities. It is advisable to keep internal checklists (Are all posts correctly labeled? Is a license available for every piece of music? Is the legal notice up to date? etc.) and seek legal advice in case of doubt to avoid expensive liability cases.

International liability models: comparison of Germany, USA, UK, Madeira, UAE

Since influencers operate globally, it is worth taking a look at different jurisdictions. The legal framework for influencer marketing and liability varies considerably in some cases:

• Germany: Considered relatively strictly regulated in terms of labeling and media law. Influencers fall under the UWG and the Interstate Media Treaty, which requires clear labeling and enables official supervision. However, the German legal tradition also protects freedom of opinion, which is why purely opinion-based statements do not need to be labeled, even if they contain positive statements about products – only a commercial intention triggers the labeling obligation. Platforms (still) enjoy liability privileges similar to the USA (keyword: Section 7 TMG a.F., now DDG), but the DSA brings adjustments here. Contractually, influencers in Germany often operate as independent service providers; restrictions apply to exclusive management contracts (see section 8).

• USA: In the USA, there are no specific laws for influencer advertising at federal level, but the FTC (Federal Trade Commission) issues guidelines. For example, according to the FTC Endorsement Guides, influencers must clearly disclose if a post is sponsored (e.g. using #ad or clear language). Enforcement is carried out by the FTC, which can impose penalties, but also by social media platforms that include these rules in their standards. An important special feature: In the USA, Section 230 of the Communications Decency Act largely protects online platforms from liability for user-generated content. This means that influencers can post content without the platform being liable – unless it concerns copyrights or federal offenses. However, influencers themselves can be held liable for false advertising promises, for example (there have been cases in which the FTC issued warnings to influencers for engaging in surreptitious advertising). Unlike in Germany, warnings from competitors are less centralized; it is more about authorities and class actions. There is also no legal notice requirement in the USA, but it is often advisable to provide contact information for reasons of transparency. Liability claims have been brought by consumers against influencers for recommendations (e.g. the Fyre Festival incident, where influencers promoted an ultimately fraudulent event) – under Californian law, liability could arise from negligent misrepresentation, for example. However, US law emphasizes consumer responsibility more strongly, so that such lawsuits have hurdles. For contracts with influencers, there is typically a great deal of contractual freedom in the US, but in the case of exclusive relationships, courts could check for unconscionability whether an agreement is immoral.

• UK (United Kingdom): Similar to Germany, there is a labeling obligation, but this is primarily monitored by the Advertising Standards Authority (ASA). The ASA has specific guidelines, e.g. that #ad or #advert must be clear and hidden advertising is not permitted. Violations lead to public reprimands and can be forwarded to the CMA. In 2021, a list of defaulting influencers was published in the UK who had failed to label correctly on several occasions – a rather embarrassing approach by the ASA. In addition, influencers in the UK may be considered “media service providers” if they generate significant income from them, which can trigger regulation under the Ofcom Broadcasting Code. Contractually, British influencer contracts are subject to common law; restraint of trade principles could overturn excessively long exclusive relationships. Platforms in the UK have their own adjustments after Brexit, but essentially similar to the EU/US model.

• Madeira (Portugal): Madeira is not a country in its own right, but part of Portugal with special tax status. For influencers, Madeira is known in particular for its tax advantages (low income tax for non-habitual residents and 5% corporation tax in the free trade zone). Legally, however, Portuguese/EU law generally applies there. Portugal has implemented the EU directives on unfair competition; influencers must also label advertising here (the rules correspond to the EU-wide harmonized Directive 2005/29/EC on unfair commercial practices). However, the supervisory authority in Portugal is less active in individual influencer cases than in DE/UK. Nevertheless, the Portuguese food authority has already investigated influencers who spread unverified health claims. Those who emigrate to Madeira therefore enjoy tax advantages, but no liability relief: EU standards such as the DSA still apply. Important: Many German influencers who move to Madeira retain their German audience. This means that they are also effectively subject to German law – German courts could assume the applicability of the German Unfair Competition Act in the event of infringements if there is a market connection to Germany. However, the choice of Madeira changes the jurisdiction and enforcement issues: plaintiffs may have to sue abroad or enforce judgments there, which can be an obstacle. In short: Madeira offers tax exemption, but not a legal vacuum for influencer-specific obligations.

• UAE (United Arab Emirates, in particular Dubai): The Emirates have issued their own regulations to curb the uncontrolled growth of influencer marketing. Since 2018, influencers who are based in the UAE and post commercially require a state license from the National Media Council (NMC). This e-media license costs around AED 15,000 per year (approx. €3,500-4,000) and is intended to create transparency. Anyone who advertises without a license risks fines (min. AED 5,000 per violation). In addition, the UAE prohibits certain content and advertisements for moral reasons: e.g. no advertising for alcohol, gambling or immoral content. Influencers must also respect local laws such as blasphemy bans and Sharia requirements – for example, revealing images or LGBTQ+ content could cause legal problems. Platforms are also active in monitoring in the Gulf region – in Abu Dhabi, the media regulator requires separate registration in addition to the NMC license. Influencers in the UAE are liable under media laws and criminal law, which is stricter (e.g. insults online can lead to prison sentences). An influencer startup in Dubai must therefore organize a special influencer license in addition to a business license. On the positive side, this regulation creates legal certainty and professionalism, which also sends a signal to investors that influencers are a recognized business model – albeit at the cost of state control.

In summary, the international comparison shows that the basic principles (advertising labeling, platform liability privilege) are often similar, but there are significant differences in enforcement and additional obligations in detail. France, for example, issued very detailed rules on prohibited promotions (cosmetic surgery, certain financial products) in 2023, which binds influencers there more closely than in Germany. In the USA, on the other hand, there is more self-regulation with official monitoring. For influencer start-ups that operate internationally, it is advisable to consult local legal expertise in order to set up compliant campaigns in the UK, USA or Middle East, for example. Contracts with influencers should check which law is applicable on a clause-by-clause basis and whether the influencer guarantees to comply with local laws (labeling, etc.). In case of doubt, contracts can also stipulate that the influencer must comply with the strictest applicable rules in order to roll out global campaigns risk-free.

Trademark protection strategies for influencers and personal brands

A strong personal brand requires solid brand protection to prevent imitation and free-riding. Influencers should therefore make use of various legal instruments at an early stage:

a) Trademark registration of the name or pseudonym: The name of the influencer (civil name or stage name) can – if distinctive – be protected as a trademark. In Germany, Section 3 (1) MarkenG stipulates that all signs, including personal names, are eligible for trademark protection if they are capable of distinguishing goods/services. Many influencers register their names in relevant classes (e.g. class 41 for entertainment/services of an entertainer, class 35 for advertising, class 25 for clothing for merch). The registration provides the exclusive right of use for the protected classes. This means that third parties may not use the name for similar goods/services without a license. Important: In the case of very generic pseudonyms, registration may fail due to a lack of distinctiveness. Trademarks that are merely descriptive or offend common decency will also be rejected (Section 8 MarkenG). A thorough trademark search in advance is essential in order to avoid collisions with older trademarks. If the influencer is internationally active, an EU trademark (protection in all EU countries via EUIPO) or even an international registration via WIPO is an option. For example, the influencer “Pamela Reif” has registered her name as a European Union trademark in order to be protected throughout Europe. Trademark protection allows the influencer startup to take action against copycat products (e.g. third-party fan merchandise with the influencer’s name/image) with a warning letter and injunction. In addition, the trademark can be licensed – an investor or partner could obtain a trademark license to use the name on products, which generates additional income.

b) Protection of the logo/slogan: Many personal brands use a logo, an abbreviation or a slogan (e.g. a characteristic hashtag or greeting). These can also be protected under trademark law. Logos as a figurative mark or word/figurative mark, slogans as a word mark if original enough. Example: The YouTuber “Unge” has had his monkey logo protected under trademark law in order to be able to use it exclusively on merchandise. Slogans must be distinctive and not merely descriptive. If registration is successful, the same rights apply: prohibition rights vis-à-vis third parties and positive exploitation through licenses.

c) Right to a name (Section 12 BGB): Independent of trademark law, the right to a name exists for civil names and established artists’ names. § Section 12 BGB offers protection against unauthorized use of the name, in particular in the case of usurpation of a name (if someone usurps the same name in the course of business without authorization, thereby creating confusion of attribution). The right to a name also applies if, for example, no trademark protection exists or is possible (e.g. because the name has not been registered as a trademark). If a third party uses the influencer’s name for similar offers and provokes confusion, the influencer can demand injunctive relief in accordance with Section 12 BGB. However, name protection is limited: It applies primarily against name-related use, not against all forms of use. In addition, more famous names must already have a reputation so that Section 12 applies (in the case of completely unknown names, there is no risk of confusion and therefore no injunctive relief). For established personal brands, however, Section 12 is an important addition, e.g. if someone registers domain names with the influencer name with the intention of intercepting users – here you can take action under Section 12 (BGH “ruhrgebiet.de” case law). Practical tip: Influencers should also secure the most important domains (“.de”, “.com” etc. with their artist name) to prevent cybersquatting.

d) Copyrights and ancillary copyrights: Although the brand is the primary property right for the name, there are also property rights in the content itself. Photos of influencers are subject to the photographer’s copyright, but the influencer usually has a say through contracts (model release) and can assert personal rights to their own image. Self-created images/videos by influencers can be protected as photographic works (Section 2 (1) No. 5 UrhG) or at least photographic images (Section 72 UrhG). This means that if someone uses an influencer’s photos commercially without being asked (e.g. to advertise for their own purposes using the influencer’s image), they are infringing copyright and possibly the right to the image. Influencer start-ups should be aware of these rights and take consistent action against infringements – often via a warning letter from a lawyer with reference to Sections 97 UrhG (omission, damages) and 22 KUG (publication without consent). Under trademark law, certain iconic images can also be protected as a figurative mark, but this is rare (you could theoretically register a striking portrait as a trademark, but in practice the name/logo is more likely to be protected).

e) Merchandise and product designs: If influencers design their own products (e.g. fashion), design law (registered design) may become relevant. A distinctive logo on clothing is protected by the word/figurative mark; the clothing design itself could be protected as a registered design if it is new and unique. In practice, influencers usually rely on the trademark and copyright for graphics/motifs.

f) Brand defense and enforcement: A protection strategy means not only registering, but also enforcing. Influencer start-ups should pursue a monitoring strategy – e.g. set up trademark monitoring to see if anyone is registering something similar, or check online marketplaces to see if unlicensed fan articles are appearing. The trademark owner is entitled to injunctive relief, information and damages against trademark infringers (Sections 14, 19 MarkenG). Warnings are often issued first. Example: The influencer “Dagi Bee” successfully took action against an online store that offered cosmetics under her name without authorization. Caution: If the influencer name also has descriptive meanings or double meanings, you have to differentiate. For example, if someone is called “Apple” and is known as an influencer, they still cannot prevent the word from being used in common parlance. Protection always relates to use as a trademark in the course of trade in a way that causes confusion as to origin.

g) Protection abroad: Personal brands are often globally active. Trademark protection is territorial – a German trademark is only effective in Germany. For an EU-wide presence, the EU trademark makes sense (registration with the EUIPO, protection in all EU member states). In terms of costs, this is more efficient than many individual trademarks. For other countries (USA, Asia, etc.), an international registration based on national trademarks can be made via WIPO. Influencers who have a large US fan base, for example, should consider registering their name as a trademark in the USA (with the USPTO) in order to protect themselves from free riders there. Difference: In the USA, trademark rights are often linked to actual use (use principle), whereas Europe has registration systems. It may therefore be necessary to actually use the name in commerce in the USA in order to have fully enforceable trademark rights.

h) Social media accounts: An idiosyncratic aspect: handles/usernames in social media. Although they are not “protected” in the traditional sense, they are covered by the platforms’ terms and conditions. Instagram and TikTok, for example, prohibit the trading of accounts or usernames. If someone creates a similar-sounding account name that causes confusion, you can often take action via platform reporting (impersonation accusation). Some influencers have been able to get fake accounts with their name deleted in this way. Legally, Section 12 of the German Civil Code (BGB) can be cited by analogy here, but the pragmatic route via the platform is usually quicker.

Trademark strategies are therefore a must for every influencer startup: the personal brand should be viewed as a valuable asset that can be actively managed, protected and licensed. A combination of trademarks, names and contractual rights ensures that the commercial exploitation by the startup remains exclusive and is not diluted by third parties.

Contractual design: management contracts, exploitation of reach, sunset clauses, buy-out vs. license model

The heart of an influencer start-up is often the contract between the influencer (as a person) and the management or their own company. This regulates how the influencer’s reach and personal rights may be used commercially. Important contract types and clauses are

a) Influencer management contract: This is comparable to an artist management contract in the entertainment industry. The influencer agrees to work exclusively with the manager/agency for a certain period of time. In return, the manager takes on services such as the acquisition of advertising deals, organization, PR, etc. Typically, the manager receives a share of the revenue generated by the influencer (e.g. 20%). Important points:

• Exclusivity: It is usually agreed that the influencer will not involve any other agents and will refer all inquiries to the manager. Caution: Excessive exclusivity can be problematic (see artist retention in section 8).

• Term: Often for a fixed term (e.g. 2 years) with an option to extend or for an indefinite term with a notice period. BGB § 627 is relevant here: In the case of service contracts of a “higher nature” (based on a personal relationship of trust), the party obligated to perform the service can terminate the contract at any time. An influencer management contract could fall under this, which would give the influencer a legal right to terminate at any time. This is why agencies often try to contractually waive Section 627 BGB. However, it is controversial whether this is effective for genuine confidential services – many lawyers believe that Section 627 is mandatory for services that are personal and confidential. However, the agency wants planning security, which is why fixed terms and contractual penalties are often agreed in the event of premature termination ( see severance clauses below).

• Services: The contract should outline exactly what the manager does (contract negotiations, brand development, scheduling, etc.) and what the influencer must deliver (regular content, coordination with manager before major decisions, etc.). It is often also stipulated that the manager may act on behalf of the influencer (power of attorney/agency power of attorney).

• Remuneration: Percentage participation is customary. Net sales from cooperations, campaigns, etc. are shared. Important: Definition of the basis of assessment (incl/excl VAT, deduction of costs?) and due date (e.g. as soon as the customer pays, passed on to the manager on a pro rata basis).

• Termination and after-effects: This is where sunset clauses come into play.

b) Sunset clauses (post-contractual revenue sharing): A sunset clause stipulates that the manager will continue to participate in certain income generated by the influencer after the end of the contract. Background: The manager has initiated deals during the term of the contract that are not fully realized until later. For example, the agency negotiates a lucrative advertising contract shortly before the end of the contract; the influencer terminates the management contract and then concludes the deal directly in order to save the commission. To prevent this from happening, managers agree sunset clauses, for example: For all contracts initiated or concluded during the term, the manager receives a share even after termination for X amount of time. Common arrangements are, for example, 100% of the original commission for 1 year, 50% for a further year, and then no further participation. It is important that such clauses are appropriately limited in amount and duration, otherwise there is a risk of invalidity due to immorality (§ 138 BGB) or as an unreasonable disadvantage under general terms and conditions law. Case law (e.g. LG Potsdam, judgment of 2.6.2021 – 2 O 101/20) has rejected a sunset rule that provided for 100% for 1 year and 60% for 2 further years as immoral, as it excessively curtails the influencer’s professional freedom. As a rule of thumb, the literature states a maximum of 25% commission for 1-2 years post-contract. In addition, only the specifically brokered transactions may be covered, not all of the influencer’s future income. Transparency is important: the clause must make it clear which income is covered. Stricter rules are somewhat more tenable in individual negotiations than in pre-formulated contracts (keyword: GTC control). Overall, sunset clauses serve to hedge the management’s investment risk, but must be fairly balanced in order to be sustainable.

c) Contractual penalties and severance clauses: A tricky issue is how to prevent the influencer from leaving the contract prematurely, e.g. to switch to another manager without commission. Some contracts contain contractual penalties in the event of premature termination in breach of contract. Alternatively or additionally, there are severance clauses: These define a payment that the influencer must make if they terminate before the contract expires. The concept is similar to the compensation claim for commercial agents (Section 89b HGB), only in reverse – here the “represented party” (influencer) pays the agent. Such provisions are generally permissible, but subject to restrictions: they must not be excessively high and must be transparent. If the contract is to be classified as a GTC, Section 307 BGB (prohibition of unreasonable disadvantage) applies. An excessive lump sum could be assessed as a contractual penalty and possibly mitigated (Section 343 BGB) or be completely invalid. Therefore: Moderate amounts or degressive structure (e.g. severance payment decreases as the term of the contract progresses). It should also be clear that no severance payment is owed if there was good cause for termination (e.g. breach of managerial duties). Such clauses are a safeguard for the management, but at the same time a restriction of the influencer’s professional freedom – in case of doubt, courts tend to protect the influencer (as is usual with artist contracts, see section 8). Severance clauses must therefore be carefully considered and formulated in a legally sound manner.

d) Reach exploitation and license models: Reach exploitation refers to all measures for converting the influencer’s following into sales. Contractually, this can be done via license agreements. For example, the influencer could license their own company or an agency the right to enter into collaborations in their name, reuse their content, sell merchandise with their name, etc. The advantage of a licensing model is that the influencer remains the owner of their intangible assets (name, brand, content) and only grants rights of use. In return, they receive either license fees or a share of the revenue. In contrast, a buy-out model would mean that the influencer sells or transfers certain rights in full. An extreme example: an influencer sells their entire brand (name, social media accounts, content) to a company, which then continues to operate it independently. Such buy-outs are rare, as the personal involvement of the influencer is usually inseparable. In practice, however, there are cases where influencers separate from their own company – for example, when an influencer startup with several talents is sold, including the contracts with these talents. In this case, it must be contractually clarified in advance whether the contracts are transferable at all (they often involve personal services that cannot be transferred without consent, Section 613 BGB analogously). Licensing models are more flexible: e.g. the influencer licenses the rights to use their content and name to their own GmbH so that the GmbH can exploit it commercially. Investors then invest in the GmbH (not directly in the person), which makes the investment more legally tangible. However, the license should be exclusive, long-term and preferably irrevocable (at least for a certain period of time) so that investors have planning security. Here again, you can work with injunctive relief subject to contractual penalties if the influencer breaches the exclusivity.

e) Remuneration models: revenue share vs. fixed salary: In some constellations (e.g. if the influencer and startup are de facto identical), the influencer may be paid a salary or managing director’s salary. This has implications under labor and tax law (see section 9 Bogus self-employment). Performance-based models remain more common: the influencer receives distributions or dividends because they are a shareholder in the company, while the operating business collects all the income. Or they remain an external service provider on a commission basis. In this case, it is important to optimize the tax structure (possibly a combination: one part salary for social security, one part bonus). For contracts with external service providers (e.g. other team members, ghostwriters, photographers), it should be clearly regulated who is entitled to the rights to the content created – usually the startup, with unlimited use so that the influencer content remains consistently usable, even if individual team members leave.

f) Other contractual clauses: Non-compete clauses and non-solicitation clauses are also worth mentioning. The former could prohibit the influencer from working with competitor agencies or competitor products during the term of the contract (and to a limited extent thereafter). However, such non-compete clauses after the end of the contract are subject to Section 74a HGB by analogy (for freelance commercial agents and probably also artists by analogy) – more than 2 years are ineffective, and compensation must be paid if a post-contractual non-compete clause is to be enforced. Many influencer contracts do without this, as it is difficult to enforce. Non-solicitation clauses can stipulate that the influencer will not attempt to poach the manager’s customers/collaboration partners or, conversely, that the manager will not poach other talent – this is more moderate and more permissible as long as it is limited in time.

In summary, it is important to find a balance when drafting contracts: On the one hand, the influencer should be contractually bound and made predictable (for the startup/investors); on the other hand, the contracts must not be so one-sided that they fail in court or poison the relationship of trust. Clear, fair rules on remuneration, obligations and termination are crucial. Sunset and exit clauses must be carefully formulated and appropriately limited. Ideally, the agreements should be individually negotiated, which avoids problems with general terms and conditions. In case of doubt, specialized legal advice should be sought here, as this complex of contracts forms the foundation of the influencer startup.

Artists’ rights in case law: BGH “Heintje”, OGH “Kiesbauer” and Co.

The commitment of artists (and we include influencers as modern “internet artists”) through long-term contracts has always been the subject of judicial assessment. Two frequently cited cases should be mentioned as examples:

BGH “Heintje”: This classic concerned the child star Heintje (Hendrik Simons), who became famous as a singer at the end of the 1960s. His parents or representatives had concluded very long-term exclusive contracts with a management/record label. The case ended up before the German courts, where the question was to what extent such a contract can inadmissibly bind a minor. The exact reference is OLG Hamburg 3 U 21/69 (“Heintje”), cited in GRUR 1970, 38. The OLG ruled, mutatis mutandis, that contracts with underage artists are subject to particularly strict standards. An exclusive commitment lasting for years, which effectively places the entire development potential of the young artist in the hands of a contractual partner, was classified as immoral (Section 138 BGB). Although the case dates back to a time before the introduction of modern youth protection regulations in the BGB (today there are §§ 107 ff. BGB, but these were also valid at the time – only parental consent was required). The core consideration was that an indefinite or unusually long-term commitment of an artist to a contractual partner unreasonably restricts their personal freedom. From this, case law has generally derived that Section 138 of the German Civil Code (BGB) can apply to so-called adhesion contracts in the artistic field. In subsequent cases (e.g. concerning musicians and artist agency contracts), the Federal Court of Justice has examined whether a contract “enslaves” the artist economically and artistically or whether there is still sufficient freedom. In particular, if a contract provides for one-sided advantages for the management (e.g. excessive profit sharing, extensive exploitation rights, long terms without the option to terminate), it is carefully examined whether the limits of common decency have been exceeded.

OGH “Kiesbauer”: This is a case before the Austrian Supreme Court. In the 1990s, the well-known TV presenter Arabella Kiesbauer had an exclusive contract (presumably with a TV station or management) from which she wanted to leave prematurely. The Supreme Court ruled (judgment around 1997/98, exact AZ often quoted as “Kiesbauer judgment”) that freedom of contract also allows long-term commitments, but that excessive commitment can be immoral in the case of personality-related services – analogous to the German view. Specifically, the Supreme Court is said to have given greater weight to Ms. Kiesbauer’s freedom to continue her professional activities than the contractual partner’s interest in fulfilling the long-term contract. One lesson from this was that time limits and termination options are essential in such contracts. Exclusivity clauses that prevent the artist from working elsewhere must not go beyond a certain level (in the film and music sector, for example, industry-standard maximum terms apply, often 3-5 years and then renewal options, but not “for life”). It was also discussed whether an exit clause against payment of appropriate compensation (a kind of severance) was necessary to maintain a balance.

German case law in general: In addition to Heintje, there are various BGH rulings on artists’ contract law. Example: A BGH ruling from 1985 (I ZR 28/83) referred back to Heintje in a copyright context. The so-called “Margot Eskens” ruling (BGH, 1968) was also a well-known case involving a pop singer, in which the transferability of an exclusive artist contract was questioned. The quintessence in Germany: In the case of exclusive artist contracts, an appropriate maximum commitment must be agreed and the artist must have sufficient scope for development. In addition, the contract must be fairly balanced (performance and consideration). In the case of Heintje, it was criticized that the young singer ceded virtually all exploitation rights and received a comparatively small share in return – an imbalance that indicated exploitation. Such contracts are considered immoral and void.

Analogies to influencers: Influencer management contracts are basically modern artist contracts. The same principles are likely to apply. An excessively long contract without the influencer being able to terminate it could be overturned by German courts. The same applies to an overly comprehensive sunset clause that effectively binds the influencer financially to the old manager for years after termination (see Potsdam Regional Court 2021, which assumed immorality for precisely this reason). The courts would examine this: Is the influencer’s professional development unduly inhibited by the contract? Is there usury (extremely unfavorable relationship between the contributions of both parties)? Is there a dominant position where the influencer had no real choice (e.g. because the management has a monopoly position)? – All of this flows into § 138 BGB assessment.

Artists’ social security fund & co: One aspect of case law is also whether influencers are considered “artists” in the sense of social security law (more on this later under bogus self-employment). We are only mentioning this in passing here: in 2019, there were discussions in Germany as to whether influencers who work as artists are subject to the artists’ social security contribution. Case law on this is still scarce, but the trend is: yes, influencers who produce creative content can be considered artists or publicists within the meaning of the KSVG. This has tax obligations for the agencies (30% of their fee).

International comparison: In the USA, there is the concept of unconscionability for contracts, which works in a similar way to unconscionability. Contracts that are extremely one-sided can be rejected by the courts. A well-known case, for example, concerned early contracts in the music industry (Motown contracts with young artists who gave up lifelong rights – such contracts were later deemed unconscionable). In the UK, there is the Restraint of Trade principle: a contract that unduly restricts someone’s freedom to trade is unenforceable unless justified. The Kiesbauer ruling reflects this way of thinking.

All this means for influencer start-ups: You can’t absolutely “own” influencers. Any agreement must respect the influencer as a creative entrepreneur. Beware of gagging clauses – they are not only ethically questionable, but can also be challenged in court. Contracts should always provide for an exit option, be it through reasonable notice periods or compensation models, so as not to violate the principles of contractual fairness. This also creates a better working relationship – influencers prefer to work with management if they know that they are not stuck in a “golden cage” situation.

Labor law aspects and bogus self-employment

One area that is often overlooked is employment law. Many influencers are formally self-employed – after all, they are entrepreneurs of their own brand. However, in certain constellations, the problem of bogus self-employment can arise, namely when an influencer is so economically and organizationally integrated into the structures of a client that they de facto act like an employee.

Criteria for bogus self-employment: In Germany, the German Pension Insurance (DRV) in particular checks the status of freelancers. Criteria include: does the influencer/creator work according to instructions, is he/she involved in working hours/location, does he/she only have one client (mono-client relationship), does he/she act independently on the market or only on behalf of the client, does he/she use his/her own work equipment, etc.? If, for example, an influencer produces content exclusively for an agency, has fixed “duty rosters”, receives instructions on content and frequency from the agency team and has no entrepreneurial decision-making power of her own, it could be argued that a de facto employment relationship exists. There have been such cases in the media industry: freelance journalists or presenters were classified as employees if they had only worked for one broadcaster for years and were treated as employees.

Consequences: If bogus self-employment is established, social security contributions must be paid (employer and employee contributions, for up to 4 years retroactively, up to 30 years if intentional). There is also a risk of criminal liability under Section 266a StGB (withholding of social security contributions). It would be fatal for the influencer startup if the creators used or the main influencer themselves were suddenly deemed to be employees – this could trigger vacation entitlements, protection against dismissal, obligations to continue to pay wages, etc.

Differentiation: Influencers are often entrepreneurs in their own right. Especially if they operate their own channels and only work with agency support, they are not employed. However, the startup must be careful when working with smaller influencers and fully integrating them into the team. Example: An agency “buys” all the rights of a TikTok artist and tells them exactly what they have to do; they may even work from the agency’s office. This is approaching a pseudo-freelancer situation.

DRV status determination procedure: In cases of doubt, you can apply for a status determination procedure with the DRV (Section 7a SGB IV) to obtain clarity. This can be useful for influencer start-ups if you are working with a talent on a long-term basis but do not want a permanent position. Such a decision creates legal certainty.

Media case law: There are several rulings where, for example, cameramen, sound engineers or freelance presenters were recognized as bogus self-employed. For example, the Federal Social Court ruled in cases of television journalists that they were bogus self-employed as they were firmly integrated into editorial processes (BSG, judgment of 31.03.2017 – B 12 R 7/15 R, on ZDF). For influencers in particular, there has not yet been a supreme court ruling, but by analogy, an eSports streamer who appears exclusively on a channel similar to a broadcaster and receives a fixed monthly fee could be considered an employee.

Employee-like persons: Even if influencers remain formally self-employed, they could be considered an employee-like person if they are economically dependent and comparably in need of protection (e.g. only one client, but still self-employed). In this case, at least some protective provisions under employment law apply (e.g. entitlement to vacation fund under the KSVG or notice periods by analogy).

Circumvention/avoidance: How do you avoid bogus self-employment? Either actually choose employment if the involvement is very close – employing influencers permanently can have advantages (social insurance, loyalty, predictability), but also disadvantages (ancillary wage costs, protection against dismissal). Or you can structure the collaboration in such a way that the influencer clearly runs their own business: i.e. has their own company, possibly several clients (not working exclusively for one agency), can organize their time freely, works from home, uses their own equipment. In case of doubt, you can contractually guarantee that no employment relationship is intended, but this only provides limited protection – it is the actual implementation that counts.

Artists vs. employees: A small special case: artists can sometimes be both, but in stage law (Section 1 TV Kü, Bühnen), for example, there are often fixed-term engagements that are somewhat excluded from protection against dismissal under employment law. This is not (yet) relevant for influencers, but when influencers are hired for film projects, for example, this is often done as fixed-term employees with a project-related contract.

Vacation and working time issues: As a self-employed person, influencers naturally do not get paid vacation or regular working hours. However, you have to be careful: If a construct has characteristics of temporary employment or similar (e.g. an influencer manager “hires out” influencers to clients), labor law obligations could arise unexpectedly (AÜG issue). In this case, the contractual structure should be clearly geared towards agency and project contracts and not look like an “employment contract”.

Overall, an influencer startup should always check the status of the persons involved. The main influencer founder is usually a shareholder-managing director – employment law does not usually apply to them (if they are a controlling shareholder). Other contributing influencers should either be genuine partners (with a share in the company or their own business) or clearly freelance with several clients. If a social security audit does occur, it is advisable to have all contractual documents to hand and to show that the person was entrepreneurially active (invoices to several customers, own investments, etc.). In this way, you can avoid the dangerous finding of bogus self-employment.

Economic and moral tensions: Protection of minors, sexual content, personal rights

Influencer start-ups do not operate in a vacuum – they often operate in gray areas between economic interests and moral and ethical responsibility. Some particular areas of tension:

a) Sexual and offensive content: Many influencers generate income with erotic content (OnlyFans, lingerie shoots on Instagram, provocative TikToks). This creates a tension between increasing reach (sex sells) and protecting minors. Young people are often among the followers; youth protection legislation (Youth Protection Act, Interstate Treaty on the Protection of Minors in the Media) requires that developmentally harmful content is made inaccessible to under-18s. Platforms such as Instagram largely prohibit nudity, while OnlyFans allows it behind 18+ verification. An influencer startup in the erotic sector must implement strict age controls. There is also the moral question of whether young influencers should be forced to post such content – there have been discussions about teenagers on platforms who post revealing images in exchange for money. From a legal point of view, welfare protection rules can apply here: Section 184c of the German Criminal Code (StGB), for example, criminalizes youth pornography (even if 17-year-olds create consensual content, its distribution is punishable). The startup must therefore draw clear boundaries: No involvement of minors in erotic content production, and no “harmless” depictions that could actually promote grooming. Morally, the management has a responsibility to protect the influencer from exploitation – not to generate content that could cause trauma or violate dignity at any cost. Contractual clauses could stipulate that the influencer may reject certain types of content, even if they would be profitable.

b) Protection of minors & platform rules: Influencers often have young fans. Product placements must respect their protection. For example, it is morally questionable for influencers to advertise gambling or alcohol to a young audience. In some countries (France, for example, recently), such advertising content for influencers is prohibited by law. In Germany, youth protection regulations apply in some cases: alcohol advertising, for example, may not be targeted at minors (Youth Protection Act, UWG). Even if legal, there can be reputational damage. Many influencers therefore refuse to advertise for certain industries (casinos, much-discussed in the Twitch community). A startup should establish a code of ethics: Which sponsors do we take, which not? Short-term profit must not take precedence over child protection.

c) Personal rights of the influencer themselves: Influencers reveal a lot about their private lives in order to appear authentic. This carries the risk of blurring the boundaries between person and persona. The management has a duty to put the brakes on the influencer if, for example, private crises are exploited for sensationalist reasons, which could damage personal rights in the long term. Example: A management urges an influencer to publicize their divorce or mental health problems in order to gain coverage – this could violate personal rights, such as the right to privacy. Although it is ultimately the influencer who decides what to share, economic pressure can be morally reprehensible. Conversely, the startup must also respect the personal rights of others: For example, if influencers make pranks in which uninvolved people are filmed and exposed, this can violate their general personal rights (right to one’s own image, honor). There is a risk of legal action against the influencer and the company. So: clear guidelines, no content that degrades third parties or presents them without their consent.

d) “Cancel culture” and reputational risks: Public opinion can quickly turn against influencers who are perceived as unethical. This has economic consequences (sponsors drop out). It is therefore not only morally but also economically sensible to uphold ethical standards. Influencer start-ups should have contingency plans in case, for example, a shitstorm arises due to controversial content. They should also be aware of their responsibility as role models – especially when setting an example to minors. One example was the criticism of influencers who promote cosmetic surgery or propagate an unattainable body image. Hardly legally tangible, but morally controversial. After all: now banned in France, self-control in Germany so far.

e) Protecting influencers from exploitation: People often think of protecting the audience, but influencers themselves (especially young newcomers) are also at risk of being exploited by industry players – be it financially or sexually (keyword “models and MeToo” – also conceivable in the influencer sector if, for example, a photographer crosses boundaries). The startup must have internal policies (e.g. two people on set, no ambiguous arrangements). There should be contractual protection, especially for models and sexual content (OnlyFans): for example, that the influencer can withdraw content at any time if they feel uncomfortable (of course, solutions must be found with regard to existing subscriptions). The startup should also protect the influencer if, for example, private intimate images are leaked – this is a punishable offense (right to one’s own image, Section 33 KUG), and the management should take legal action here.

f) Privacy and data: Influencers often collect data about their followers (newsletters, competitions, etc.). The GDPR must be complied with here. But also morally: no misuse (sale of fan data to third parties without knowledge), respect for fan posts, reasonable data protection internally too (e.g. team members do not see private messages without being asked). Breach of trust can damage the community.

Overall, influencer start-ups are well advised to adopt a code of conduct that goes beyond what is required by law. This could include points such as Responsible use of advertising (no harmful products), ensuring that no content is published that violates dignity, protection of children (no depiction of own children without protection, no sexualized content for under 18s, etc.), transparency in the event of possible digital manipulation (also AI aspect: if filters or deepfakes are used, openness about this so as not to set false body ideals). Such measures not only serve the good conscience, but also prevent legal conflicts, as many “scandals” can quickly turn into legal problems (such as youth protection proceedings, personality rights lawsuits, criminal investigations). The challenge is to maintain these high standards without stifling creativity. So everyone involved needs to be sensitized.

Cross-border contract models and data protection (GDPR)

Influencers often operate internationally: fans worldwide, deals with foreign companies, residence abroad. This brings with it a number of legal peculiarities:

a) International contract law: If a German influencer startup concludes a contract with a US advertising client, the question arises as to the applicable law and place of jurisdiction. It is customary to stipulate this in the contract (choice of law clause, jurisdiction or arbitration clause). Without an agreement, conflict of laws rules apply: German law may apply to service contracts under the Rome I Regulation if the influencer provides its characteristic service from Germany and nothing else has been agreed. However, it may also be the case that the foreign partner provides its general terms and conditions with a choice of law. In this case, care must be taken to ensure that the influencer does not unnoticeably subject himself to foreign law whose implications he does not know. Therefore: Clarity through choice of law. Many influencer agreements with global brands choose English law or Swiss law as a neutral ground, plus an arbitration clause (e.g. ICC arbitration). It is important for the startup to keep an eye on costs and enforceability – an arbitration award is usually enforceable internationally, a German judgment in the USA, for example, is rather difficult to enforce and vice versa.

b) Tax permanent establishment issue: If an influencer has a company in Germany but operates from Dubai, for example, a permanent establishment for tax purposes may arise. This is only marginally relevant here, but nevertheless: The permanent establishment issue and double taxation agreements must be kept in mind. Influence on contracts: Sometimes, for tax reasons, the influencer is billed for foreign business via a subsidiary or intermediate company based there.

c) Data protection (GDPR): Influencer start-ups process personal data – of followers (comment lists, direct messages), of customers, of newsletter subscribers, etc. The GDPR applies as soon as the processing is related to the offering of goods/services to EU citizens (marketplace principle). An influencer with a global reach must therefore comply with the GDPR for their EU followers. This means: provide a privacy policy, obtain consent for newsletters if necessary, only use processors with GDPR-compliant contracts (e.g. if you use email tools or cloud analysis). In the case of international traffic, data often flows to third countries (e.g. if the social media manager is based in the USA and accesses fan data). Suitable guarantees (standard contractual clauses) must be put in place here. Important for fans: right to information, deletion, etc. The startup should appoint a data protection officer if necessary (in the case of extensive data processing, usually from 10 employees regularly with data, § 38 BDSG). Even if not required by law, it is good to have someone responsible for privacy internally. One particular issue: influencers communicate a lot via platforms (Instagram, YouTube). The platform stores the data, but the influencer uses it. According to the current view, influencers are jointly responsible for their fan pages on Facebook, for example (ECJ fan page ruling 2018). Accordingly, an Instagram influencer may also be jointly responsible for the data on their page. Practically difficult to implement, but should not be ignored. At the very least, you should link to the data protection information in the bio/imprint.

d) Cross-border content licenses: If a German startup wants to market an influencer’s content internationally (e.g. sell clips to foreign media), the contract should specify that the rights are granted worldwide (territorially unrestricted) or not. Otherwise, the influencer could later say in the USA that my personal rights under Californian law apply here and you are not allowed to broadcast it there. Also to be considered: language versions. If, for example, translations or dubbing are made for exploitation abroad, these must also be covered (UrhG editing right, personality right to one’s own spoken word, etc.).

e) International compliance: The topic of AI should be mentioned: If the influencer startup uses AI-generated content (e.g. deepfake voices, virtual influencers), different regulations apply internationally. In the EU, the AI Regulation is coming: transparency is mandatory for deepfakes. This means that if an influencer video was actually generated by an AI (e.g. avatar), it must be labeled as soon as it realistically simulates human behavior. This regulation is expected to come into force with the AI Act. This may become relevant if, for example, a deceased influencer continues to be used virtually, or an influencer multiplies their voice/face using AI (for voice output in different languages, for example). Such futuristic models should be anticipated in contracts: For example, who owns the training data (the videos as AI training material), is management allowed to use a digital clone of the influencer? Probably not without an explicit agreement, as this affects general personal rights. It is better to explicitly regulate whether and how AI may be used.

f) Arbitration court vs. court: Arbitration agreement often included in international contracts. Advantage: Enforceable in many countries thanks to the New York Convention. Disadvantage: expensive. Mediation can be an alternative – influencer contracts can contain a mediation clause so that international disputes can be resolved amicably before the social media war starts. This also protects the public image.

g) Applicability of German IP law abroad: If a foreign influencer with a trademark in their home country wants to appear in Germany – should they apply for trademark protection here? Conversely, a German influencer expands to the USA – consider applying for trademark protection there. IP lawyers are needed here. Domain law: If someone abroad registers the influencer’s name as a domain and uses it to direct fans, domain grabbing can be combated under UDRP proceedings (e.g. for .com domains). These are international mechanisms that can become relevant.

As a result, the cross-border aspect requires a keen eye on choice of law, data protection and IP management. It is better to invest a few more lines in the contract (e.g. detailed choice of law clause, clarify GDPR order processing, worldwide granting of rights) than to have to go through the hassle of suing country by country later on. Data protection in particular is a compliance blocker: some US partners do not want to sign any GDPR obligations – you then have to consider whether to forego the deal or find ways around it (e.g. leave data in the EU). For influencers who transfer data internationally (e.g. team in the USA has access to the Instagram account with EU fan data), standard contractual clauses between the EU company and the US team are mandatory in order to be legal. This should be taken into account when setting up an influencer startup.

Approaching investors: Legal challenges when scaling management structures

For many influencer start-ups, the question of how to get investors on board in order to grow arises at some point. However, traditional venture capital providers have long been skeptical of models based on individuals. So how can you overcome the limitations of the “agency mentality” and create an investable, scalable business model? And what are the legal hurdles involved?

a) From star to structure: A central problem is the dependence on individuals. A VC investor is reluctant to invest in a company whose value is solely dependent on one person who can leave at any time. An influencer startup must therefore legally transfer the brand and reach from the individual to the company – be it through licenses or transfer of ownership. In practice: The influencer founds a limited liability company (or similar legal form), which concludes a comprehensive contract with the influencer that grants the limited liability company exclusive rights (rights of use to content, exploitation rights to name/image, etc., ideally on a long-term basis). This allows the value to be transferred at least in part from the person to the company. Investors then see that the company has contracts in hand that do not immediately become worthless even if the influencer leaves. However, a key person risk remains: legally, you can try to keep the influencer on board via vesting or earn-outs. For example, the influencer could have founder shares that only vest over the years (so there is still motivation to stay). Or a good leaver/bad leaver clause is agreed in the investment contract: If the influencer leaves the company before a certain time without good cause, he must return his shares more favorably (bad leaver); if he stays, he keeps them (good leaver). Such corporate law mechanisms are important, but they must be carefully synchronized with employment/service contract law.

b) Scaling through a multi-talent platform: Some influencer start-ups pivot away from the single star and build a portfolio of talents – a kind of talent agency 2.0 or influencer network. This increases scalability because the company is not reliant on just one person. Investors reward diversification. In legal terms, this means concluding management contracts with several influencers. The challenge: A consolidation model can compete with traditional agencies, which is legally okay, but you have to pay attention to antitrust law if you bundle too much market (currently still rather remote in the influencer market). NDAs and no-poaching must also be agreed internally so that influencers do not poach each other within the platform or take all customers with them when they leave. A clear regime of contract terms and perhaps also incentive systems (e.g. profit sharing for top talents) helps to retain network effects.

c) Productization of the business model: One way to become investable is productization – i.e. turning services into repeatable products. E.g. development of a technology platform (an app that brings influencers and brands together). The startup then acts not just as an agency, but as a tech company, which VCs prefer. Legally, however, this means additional dimensions: Software law (copyright on the code, licensing, general terms and conditions for users), possible platform liability as with marketplaces, etc. Also data law, if the platform uses data analytically (big data of followers). The pitch to investors is then: “We have the software that scales influencer marketing” instead of “we manage person X”. However, the existing contractual obligations of the talents must be transferred to such a platform (data protection: can I share their performance data with everyone? etc.).

d) Overcoming agency boundaries: Traditional agencies have linear growth – more clients require more employees. Scaling is limited. An influencer startup can overcome this with platform solutions, automate content creation, measure reach digitally and make processes more efficient. From a legal perspective, this requires clear regulations on the intellectual property of automatically created content, data protection issues when automatically processing user data and contractual clarifications on who is liable for automated errors. Investors are particularly interested in intellectual property issues, as software-based solutions are only attractive if they remain legally secure and can be used exclusively. In addition, general terms and conditions and licensing conditions must be carefully drafted in order to minimize liability risks.

The legal complexity of transitioning from a single influencer to a scalable, investable corporate structure is significant, but necessary to obtain growth capital from VCs.

Conclusion

The legal organization and entrepreneurial structuring of influencer start-ups and personal brands is a complex undertaking that requires in-depth knowledge in a variety of legal areas. The essential areas of law include, in particular, contract law, trademark law, data protection law, copyright law and international legal issues, which must always be kept up to date in order to master future challenges with confidence. The particular legal challenge for influencer start-ups lies in the fact that they are often built around one or more personal brands, which in turn affect both personality rights and trademark law aspects. It is therefore necessary to comprehensively secure these brands at an early stage and protect them in the long term through strategic brand management in order to ensure sustainable value creation.

To ensure commercial success, influencer start-ups must choose the right monetization strategies and combine these with legally compliant contract design. The various models – from sponsored content and own products to platform monetization – offer a wide range of opportunities, but also harbour considerable risks if attention is not paid to clear and forward-looking contract design from the outset. Particularly when it comes to advertising labeling obligations and liability for third-party content, there are considerable stumbling blocks that can lead to warnings or legal disputes in the worst-case scenario. Proactive legal advice and carefully conducted compliance checks are therefore essential in order to effectively minimize such risks.

Influencer start-ups must be particularly careful when it comes to data protection, as they often process considerable amounts of personal data – both from followers and cooperation partners. Compliance with the GDPR and other relevant data protection laws is not only a legal obligation, but also of great importance for building trust and long-term customer relationships. International legal issues are added to this as soon as the reach and economic focus of the start-up extend beyond national borders. Here, specific knowledge of the different regulatory requirements of various countries is necessary in order to effectively manage liability risks and tax issues, for example.

Attracting investors and the associated scaling of an influencer startup requires a strategic solution to the central problem of dependence on individuals. Investors prefer business models that are not completely dependent on individuals, but have an independent entrepreneurial structure. This can be achieved through intelligent contractual solutions such as exclusive license and transfer agreements that secure the startup long-term usage rights to the brands and content. Corporate law instruments such as vesting regulations, earn-out mechanisms and good leaver/bad leaver clauses also help to ensure the long-term commitment of key individuals and thus make the company valuation attractive.

In addition, the diversification of the business model – for example through the development of a multi-talent platform or technology platforms for automated reach marketing – opens up significant growth potential and simultaneously reduces the risk for investors. However, such scalable solutions require additional legal considerations, for example in the areas of intellectual property, platform liability and competition law. Clear and comprehensive contractual regulations on intellectual property, rights of use, limitations of liability and data protection issues create the necessary basis for sustainable growth and investor confidence.

In summary, it can be said that the long-term prospects of an influencer startup depend crucially on whether the legal challenges are taken seriously and systematically addressed from the outset. Influencer start-ups can only develop their full potential with a comprehensive legal strategy that both protects the personal brand and creates suitable structures for scaling and attracting investors. The effort required for precise legal structuring pays off several times over in the long term: in the form of reduced risks, increased willingness to invest on the part of external investors and ultimately sustainable, secure commercial success.