
We’ve Raised $60M in New Funding - codegeek
https://patreonhq.com/new-round-funding-816d5a592477
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sctb
Previous discussion:
[https://news.ycombinator.com/item?id=15254069](https://news.ycombinator.com/item?id=15254069)

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countdownnet
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.

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stingraycharles
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 planning to do that ?

~~~
eganist
Business loans are granted all the time on the basis that a company
demonstrating profit or a plan to reach profitability (this scenario is more
constrained) should theoretically be able to pay the loans back.

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.

~~~
rockarage
A good software service company does not need to raise so much money to
accelerate their growth. Raising more money won't prevent them from being
disrupted by a competing implementation. We can argue their action can invite
competition from more nimble operations who can take less money from creators.
Look up DistroKid, they compete with companies much larger, with far more
funding, yet DistroKid is doing very well as a business.

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probably_wrong
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.

~~~
cryptoz
> 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](http://www.paulgraham.com/growth.html)

~~~
s73ver_
"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."

Do they really, though?

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raesene6
I 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"
growth, so there's a worry that they'll need to extract more money from
existing creators to show the return on investment that their external
investors are likely to seek...

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replicatorblog
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.

~~~
chx
I support my favorite musicians on Patreon and usually get gadgets on
Kickstarter although I admit I supported the occassional video game or novels.
But Patreon is about continous delivery while Kickstarter is about one big
bang, delivery is on the several months-1/2 years scale while Patreon doesn't
work well if you don't deliver a thing every month preferably more than one.
Seems like a completely different thing.

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alexroan
Should've just set up a Patreon page for Patreon.

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IshKebab
That's how Gratipay does it:

[https://gratipay.com/Gratipay/](https://gratipay.com/Gratipay/)

But they're only getting enough to pay for like, 1/10th of a developer...

~~~
badosu
Also, Bountysource:

[https://salt.bountysource.com/teams/bountysource](https://salt.bountysource.com/teams/bountysource)

What amuses me is how software projects prefer Patreon instead of
Bounstysource

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dkersten
Really? I've not yet seen any software projects on patreon.

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countdownnet
[https://www.reddit.com/r/linux/comments/5omtvg/patreons_to_s...](https://www.reddit.com/r/linux/comments/5omtvg/patreons_to_support_open_source_projects_please/)

~~~
dkersten
Oh wow. That's a surprisingly long list. As someone who actively backs
multiple people on patreon, I'm surprised that I didn't see this before now.

~~~
badosu
Also, [https://www.patreon.com/mastodon](https://www.patreon.com/mastodon)

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stcredzero
_And there are dozens of you making over $30k per month!!_

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?

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otakucode
The biggest earners are, to the best of my knowledge, mostly adult artists.
Not porn stars, but artists who create erotic artwork, often for 'niche'
communities. I imagine Patreon does not want to shout too loudly about that
sort of thing, but I am extremely glad they are there making the world a
better place. Our culture can never be made 'advertiser friendly' overall and
its disgusting to see the degree of puritanical prudishness on display at most
tech companies. They are stultifying human culture and actively preventing
actual humans to be the ones determining what constitutes our culture. Patreon
works directly against that, and for that they are angels.

If they ever move to boot adult creators, that will be the day Patreon dies.
If they ever get bought by Google or some other tech titan, it will be that
day instead.

~~~
stcredzero
A plurality is marked NSFW, not a majority. Also, the population of creators
that make $40k per year or more is about 350.

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mbillie1
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.

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otakucode
I love Patreon but am scared for them. As more and more YouTube creators find
it untenable to survive on revenue from YouTube (which is something YouTube
wants to happen, IMO) and they turn to Patreon... that puts Google in a
difficult position, serving basically as the free-cost video host for those
creators who likely won't bother putting ads on those videos either.

And if Google makes a big to buy Patreon, I REALLY hope Patreon would refuse
it no matter how large it would be, but I can't imagine anyone walking away
from 'never have to work again' money. Google buying Patreon would cause me to
wear black and mourn for at least a month. They would move aggressively to
remove all creators who do anything not deemed 'advertiser-friendly' (really
anything that wasn't mainstream in the early 2000s when Google came about,
which is where Schmidt wishes to petrify human culture) and then progressively
move to make it less and less possible for people to make a living doing
things which members of the public wished to support. Such a model does not
lend itself to what Schmidt sees as the proper structuring of society, with
centralization of wealth into a ruling minority class establishing the
'pillars' of society, any widespread movement looks to people of his
perspective like rats chewing through those pillars. He made a smart move
publishing his book where he puts forward the idea that Google should use its
position and power to actively 'guide' human culture for the good of the peons
not as wise as he. If he'd published it online, people would read it.

~~~
shevy
Unfortunately I fear that Google has become too big for the whole world and
will slurp up everything that can be a competition, just like they slurped up
youtube too at one point in time. And we all know that money moves people, so
there is that - github, patreon, twitch. Google has things to buy.

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monkeypizza
I wish they'd take Craigslist's path - simple, small, and providing amazing
value.

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shevy
Pretty nice success story.

Unfortunately money changes the way how companies work - and often not to the
better.

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k__
it's sad that content creators have to beg for money or litter their stuff
with ads :/

~~~
firmgently
I wish I could get my head around this, I'm an artist and people tell me my
work is good and I do sell some, but I can't bring myself to go on to Patreon
because I feel like it's begging (although weirdly I only apply this to
myself, I don't think badly of other people that do it... but then I don't
look down on people who beg anyway, I grok St. Francis of Assisi so I'm not
sure what all of this means). Meanwhile I've moved into a caravan and often
have trouble affording to eat (luckily I'm still a bit fat haha).

~~~
ekimekim
I highly encourage you to get on something like patreon!

I support a number of artists on patreon, and I don't think of it as giving a
handout or see them as begging - I'm paying them for the content that I
consume, and I'm paying them to give them incentive (edit: and means) to
continue producing that content. Sure, there's no formal contract, but I
consider it a form of "work for pay" all the same.

