I haven't paid much attention to how they run as a business but I am a happy consumer, I get 2 excellent podcasts from Patreon at a price I am happy to pay. Hope they stay in business.
We’ve Raised $60M in New Funding
11–20 of 64 posts
Re: We’ve Raised $60M in New Funding
#12it's sad that content creators have to beg for money or litter their stuff with ads :/
A little, but people using these tip sites are generally in an awkward spot. They make content that lots of people enjoy but it's not valuable enough that people would directly pay for it. The opportunity costs of actually paying quickly eclipse the value of the content so people choose to do without. It's the same situation with a lot of paid apps.
Re: We’ve Raised $60M in New Funding
#13Could someone explain why Patreon needs to raise funding? I thought a service built with the express concept of collecting money (and a very popular service at that) wouldn't need external funding. Also, in an unrelated point, > I had been making YouTube videos with my band, Pomplamoose Finally! I thought I was crazy for thinking it was the same guy. If you haven't listened to his band, you definitely should.
> Could someone explain why Patreon needs to raise funding? I thought a service built with the express concept of collecting money (and a very popular service at that) wouldn't need external funding.
I don't know the details of Patreon, but profitable companies raise money all the time. Patreon is presumably a startup, and has growth in mind. It is likely that they want to grow faster than their current cash flow would allow - in fact, they may need to do this in order to survive in the long term. A more in-depth description of this from pg: http://www.paulgraham.com/growth.html
Re: We’ve Raised $60M in New Funding
#14I like the patreon model, as it's let me support various creators whose content I like (Webcomics/Websites/Musicians) without having to endure web ads. I get what this post is saying about wanting to add new features, but I can't help but be a little apprehensive about what taking this amount of external funding means for Patreon's future. It doesn't strike me as a business that's likely to experience "hockey stick"…
Right. How many features do they need to add? Kickstarter raised a few million dollars and has grown organically, and fairly rapidly, since. Who is the natural acquirer for Patreon? Is it a likely IPO candidate? It's cheap criticism to say that it would be an easy extension for Kickstarter to offer this kind of funding model, but it really would. The cultural barriers that usually keep companies from moving into adjacent areas are non-existant. Both companies serve the same "Creative Class" customer with nearly identical positioning. I'm long Kickstarter, moderately short Patreon.
Re: We’ve Raised $60M in New Funding
#15Could someone explain why Patreon needs to raise funding? I thought a service built with the express concept of collecting money (and a very popular service at that) wouldn't need external funding. Also, in an unrelated point, > I had been making YouTube videos with my band, Pomplamoose Finally! I thought I was crazy for thinking it was the same guy. If you haven't listened to his band, you definitely should.
The TechCrunch article about the funding [0] claims they make about $7.5 million a year, based on their transation fee and some public "total payments" numbers.
I can see that being too little if they're hiring a significant number of people. This is a nontrivial dilution so I assume that they need the money.
Re: We’ve Raised $60M in New Funding
#16I like the patreon model, as it's let me support various creators whose content I like (Webcomics/Websites/Musicians) without having to endure web ads. I get what this post is saying about wanting to add new features, but I can't help but be a little apprehensive about what taking this amount of external funding means for Patreon's future. It doesn't strike me as a business that's likely to experience "hockey stick"…
If someone on Patreon becomes really popular then Patreon could earn good money from that without changing their fee structure. It could happen. But I wouldn't bet on it.
Re: We’ve Raised $60M in New Funding
#17I like the patreon model, as it's let me support various creators whose content I like (Webcomics/Websites/Musicians) without having to endure web ads. I get what this post is saying about wanting to add new features, but I can't help but be a little apprehensive about what taking this amount of external funding means for Patreon's future. It doesn't strike me as a business that's likely to experience "hockey stick"…
It really depends on how sticky the patrons are, which I would guess is very sticky. A dollar in advertising revenue that Snapchat books isn't as valuable as a dollar that Patreon books for a lot of reasons, but primarily because they have a direct-to-customer relationship and because they generate predictable subscription income.
I would think about the Patreon opportunity as such -
1/ Patreon has built a platform that has proven to be the best way for artisans and creatives to create a direct connection to their fans
2/ Since the inception of the company, they have seen very strong improvements in artist growth, patron growth, and retention in both.
3/ The total addressable market is huge. Every creative is a potential user. Their platform may even be growing the market by allowing people to quit their normal jobs to pursue creative ideas.
4/ They want to raise the money to build new functionality to continue to drive growth by addressing new segments of creatives and improving the product to drive retention.
In summary, I think Patreon has a compelling story for raising money. They need to spend money to grow but not like Snapchat because the consistency of their cash flow is a major reason to continue to invest in retention.
Re: We’ve Raised $60M in New Funding
#18For those wondering why Patreon went for more funding even though they should make about $7.5 million this year from the 5% fee they charge: They are growing faster than their current cash flow can handle and need to increase their staff beyond the 70+ they already employ. They are still a "young startup" where they can get this sort of funding where a standard growing business would get a loan.
Re: We’ve Raised $60M in New Funding
#19Could someone explain why Patreon needs to raise funding? I thought a service built with the express concept of collecting money (and a very popular service at that) wouldn't need external funding. Also, in an unrelated point, > I had been making YouTube videos with my band, Pomplamoose Finally! I thought I was crazy for thinking it was the same guy. If you haven't listened to his band, you definitely should.
Something I have to continually fight is my own perceptions. Because, I agree with you, I think Patreon is well known, they should be crazy profitable, etc.
But if you look at the larger scheme of things: How many Podcasts have a Patreon? How many YouTube channels? Is it even on their radar? And the answer is of course -> fractions of a single digit percentage.
Even compared to some other "competitors" they are quite small - consider that there are individual Kickstarters that have raised more than Patreon's profits over the past year.
They need to massively ramp up user/influencer acquisition: sponsoring conferences, booths at tradeshows, paying people to use them, a big "success team", etc. etc.
Re: We’ve Raised $60M in New Funding
#20For those wondering why Patreon went for more funding even though they should make about $7.5 million this year from the 5% fee they charge: They are growing faster than their current cash flow can handle and need to increase their staff beyond the 70+ they already employ. They are still a "young startup" where they can get this sort of funding where a standard growing business would get a loan.
If you want to see how creators on Patreon are doing: https://graphtreon.com/top-patreon-creators