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Should've just set up a Patreon page for Patreon.
That's how Gratipay does it: https://gratipay.com/Gratipay/ But they're only getting enough to pay for like, 1/10th of a developer...
https://salt.bountysource.com/teams/bountysource
What amuses me is how software projects prefer Patreon instead of Bounstysource
For 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.
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. 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.
What's your guesstimate of how many engineers it takes to run the company? Multiply that by $200k [+]. Quintuple [++] the result. Divide by your guesstimate of their margin. That's the sales number you need to not raise funding.
This math is brutal. You can build a very nice product that a lot of people like and still get run over by it.
[+] Total cash cost to the company (salary, benefits, taxes, etc). This corresponds to an offer of approximately $140k~$160k to the engineer.
[+] Judgement call required here; software startups generally spend 20%~35% or so on engineering. The other big bucks that are not COGS are marketing, sales, and G&A ("everything else that isn't COGS").
For 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.
For 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.
This still doesn't strike me as a very satisfying answer. "growing faster than their current clash flow can handle" can also be phrased as "they are spending too much money". Big investments always raise big expectations, and can ruin a perfectly fine business (model). Why are they spending more than they earn ? At this valuation, it seems like they are going to need a unicorn exit at some point. How are they plannin…
Investment rounds are similar in this way but tend to address the "plan to reach profitability" or "plan to exit" scenarios more directly than a loan might. Patreon's making money, but Patreon needs to stay ahead of current and potential competitors, continue to expand, and continue to grow their positive cash flow. Sure they could keep going without raising investments, but if they run the risk of being disrupted by competing implementations of the same business model (a very real risk), it'd be stupid not to raise money to accelerate their growth.
For 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.
This still doesn't strike me as a very satisfying answer. "growing faster than their current clash flow can handle" can also be phrased as "they are spending too much money". Big investments always raise big expectations, and can ruin a perfectly fine business (model). Why are they spending more than they earn ? At this valuation, it seems like they are going to need a unicorn exit at some point. How are they plannin…
Probably by making more money, which this fundraise will help them do faster.
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. 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. [0] https://techcrunch.com/2017/09/14/patreon-series-c/
Is there any way of browsing these creators? How many creators make money at the rate of $40k per year? Also, is there a typical curve that earnings follow over time?
For 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.
Naive question: what are all those people doing?