This is by far the largest and most prominent crime committed against freelance artists.  It's absolutely disgusting to see some people even attempt to get away with this.  I get these offers all the time, and these offers always, ALWAYS, get immediately deleted.  I don't keep track of them, I don't respond, and I immediately purge it from my memory.

Working for free, expecting royalties as compensation.

To a new freelance artist, the opportunity sounds amazing.  What if you're the guy who creates the next Batman?  Imagine, having a promised twenty percent stake in the whole franchise?  Do this with enough stuff, and inevitably you'll land upon a runaway success that brings freight trains of gold straight to your doorstep, right?

Every artist makes this mistake at least once.  I did it.  You probably did it.  Every big name artist I know has done this.  They've worked for free on something that wasn't guaranteed to earn revenue, and paid dearly for it.  Luckily for me, it was just a week's work, but I know people who contributed to projects for several months and haven't gotten a single check out of it.

This is why "royalties as compensation" doesn't work, and why any aspiring producer should be publicly shamed and immediately IP Blocked from all job boards should they be so insulting to the craft as to suggest it a valid means of payment.

Say for example I were to agree to a 10% cut of a comic.  Or 20%.  Heck, let's make them super generous, I get 80% of net profits on a comic.  I could make up any percentage I want, actually, and I'll still get the same amount in the end.

Zero.

Here's how.  I complete the comic.  Let's even give these guys some credit.  It doesn't immediately crash and burn in sales like 95% of all unfunded ventures go.  Let's glance over the fact they were unprofessional enough to resort to "royalties as compensation" which implies a lack of professionalism regarding other matters like advertising and distribution.  Forget all that, they defy all laws of physics and their comic sells an impressive 2,000 issues at five bucks apiece over the course of three months, meaning a gross income of $10,000 in a single fiscal quarter.

Awesome job!  80% of that would land me $8,000!  Right?  Told you these dapper blokes were generous at 80%!  But how generous are they really?

Economics lesson, kids.  Take a seat, because this joke gets pretty funny.  Let's say that they printed a total of 3,000 issues.  Printing cost for that would run about $4,000.  Therefore, the $10,000 gross you made is now $6,000.  Still, 80% of that is $4800 just for you, still not bad for an 80% cut (did I emphasize how unrealistically generous these guys are?  I know, right!).

Now let's talk about how they sold all those copies.  Like most independent sellers, they got their money through conventions.  Over the course of three months, they could attend up to six different comic conventions.  Boothing at each one runs about $500, so that's $3,000 when divied up between six conventions.  Oh, did I mention that with "royalties on net profits," business expenses like attending conventions to sell product cut into your own chunk of money you're owed?  Should've clarified that earlier.  Because now you realize, they're not paying you a whole lot at this point.  In fact, the work you did on that book, the money you're supposed to be receiving, is now being used to pay for its printing and distribution.

Let's also not forget, these guys are seasoned comic distributors seeing as they're going to so many conventions.  So they also know to write off everything else as a business expense.  Now your "royalties on net profits" are going towards paying their gas.  You're now paying their lodging.  You're paying for their food.  You're paying for the late night binge kareoke session they got hopelessly sloshed at after picking up two underage Adventure Time cosplayers at the adjascent Burger King.

And when all is said and done, guess what.  There are no net profits left.  You get 80% of zero.  In fact, they're probably in the hole at this point.  Technically, as 80% shareholder of the venture, you owe THEM money to make up how far into the red they went after blacking out and regaining consciousness nine hours later covered in a pile of Monster High merchandise in aisle seven of a Walmart eighty-nine miles south in Fullerton California.

Oh, when I said earlier that this joke gets funnier?  I lied.  There is no punchline, actually.  It's just one gigantic tragedy, like some glorious opening sequence to The Final Destination except it's not happening to people we're championing gratuitous misfortune upon.

Compensation via royalties is an absolute sham, a dingy scheme to swindle well-meaning hard-working artists into giving them product they can peddle unto others to satiate their own ravenous appetite for raucous parties and free trips to see the voice cast of Futurama.

And worst of all, I wish I thought of it first.  Crafty jerks.