Reliance on Licensed Intellectual Property (IP): The company's business model is heavily dependent on obtaining and maintaining licenses for popular culture characters and brands. A failure to secure or renew key licenses, or a decline in the popularity of existing licensed IP, could significantly harm sales and revenue.

Changing Consumer Preferences and Trends: The collectibles market is highly susceptible to shifts in consumer tastes and pop culture trends. Funko must accurately forecast and adapt to these changes to remain relevant, and a misjudgment could lead to excess inventory or missed opportunities.

Intense Competition: Funko operates in a competitive market for collectibles, toys, and apparel. Competition comes from other licensed product manufacturers, larger toy companies, and even smaller, niche creators, potentially leading to pricing pressures or loss of market share.