First point first - ALL movies, TV shows, books, songs and video games (made commercially) ARE funded in advance - usually by publishers. The change is from the single publisher/financier model to the self-published crowd-financed model. Having the cash before producing things hasn't changed.
I can also tell you than in the game industry (and there isn't a significant difference for the others) you have to do some good, small, sometimes free works first before the publisher will touch you.
Second, why would you think people will jump from a flash game to AAA? There are many small games on kickstarter looking to get $1000 and hit it, then next time create a bigger game for $2000. These guys already delivered several AAA games, and were looking for 400k, not millions of dollars.
Copyright is automatic and has nothing to do with how a project is funded.