Patreon Funding Explained for Creators and Businesses

Patreon is a membership platform that allows creators to earn money from their fans or supporters by offering exclusive content, early access, or other rewards in exchange for a monthly contribution.

Patreon takes a 5% commission on every transaction, and payment processing fees can range from 2.9% + $0.30 per transaction.

As a creator, you can set up different tiers of rewards, each with its own price point, and fans can choose which tier they want to support.

Patreon also offers a feature called "Patreon Analytics" that provides creators with insights into their earnings, engagement, and audience demographics.

For another approach, see: Account Funding Transaction

Patreon's funding rounds have been a key factor in the platform's growth. The company's first funding round was a seed round in August 2013, securing $2.1M from investors including SV Angel and CRV.

Patreon has received funding from several notable investors, including Tiger Global Management, Woodline Partners, and Wellington. Their most recent funding round, Series F, raised $155M in April 2021, valuing the company at $4B.

Here's a breakdown of Patreon's funding rounds:

Patreon is a subscription-based platform that lets professional content creators receive direct payment for their content, products, and services.

Founded in 2013, Patreon was built to bridge the gap between creators and their fans, fittingly called patrons.

Patreon doesn't run on ad revenue or clicks, unlike some other platforms.

Patrons subscribe to get closer to the creators they love, while creators leverage Patreon's paid membership and commerce tools to deliver great content and subscription packages.

Patreon's premise is refreshingly clean: creators offer content, services, or products, and patrons pay for them.

Prices can be set for one-time fees or as part of a subscription model, often with a tiered pricing structure.

The higher a patron pays, the more access and content they'll receive.

Patrons can access your content directly through your page, or if they've already subscribed, your posts will pop up in their feed.

For patrons, Patreon is a candy store – they can browse, buy, and subscribe to content from their favorite creators.

Patreon has reached a major milestone, valued at $4 billion after raising $155 million in its latest funding round. This significant investment was led by Tiger Global Management, with participation from Woodline Partners and existing investors.

The funding round has enabled Patreon to accelerate its progress on various initiatives, including enhanced creator and fan experiences on both desktop and mobile, international expansion, and new content consumption tools. The company plans to explore potential acquisitions to further expand its talent and product capabilities.

Patreon's creators have earned more than $2 billion since the company's inception in 2013. The platform has seen a surge in membership since the pandemic began, driving investor interest and solidifying its position in the creator economy.

Here are the key investors involved in Patreon's latest funding round:

Patreon's CEO, Jack Conte, expressed his gratitude for the investment, stating that it will help the company continue to spearhead the creator economy movement.

Patreon has received funding from several investors over the years, with the first investment coming from SV Angel, CRV, Atlas Venture, Rothenberg Ventures, Freestyle, Thrive Capital, and Alexis Ohanian in its Seed round on Aug 02, 2013, for $2.1M.

Tiger Global Management, Woodline Partners, and Wellington made their first investments in Patreon on Apr 06, 2021, in its Series F round, which raised $155M and valued the company at $4B.

New Enterprise Associates, Wellington, Glade Brook Capital, Thrive Capital, DFJ Growth, Index Ventures, and Lone Pine Capital all invested in Patreon's Series E round on Sep 02, 2020, which raised $90M and valued the company at $1B.

Thrive Capital, Index Ventures, CRV, Freestyle, and Accomplice invested in Patreon's Series B round on Jan 19, 2016, which raised $30M.

Here's a list of some of Patreon's notable investors and the rounds they participated in:

Patreon has also received funding from several other investors, including Lone Pine Capital, Glade Brook Capital, and Initialized Capital, among others.

A different take: What Are Capital Funds

One last push is needed to get your Patreon earnings into your bank account – that's where the payout fee comes in.

US creators enjoy a $0.25 payout fee per transaction, which is a pretty sweet deal.

PayPal's payout fees are set to 1%, up to a maximum of $20, which means you can earn up to $2,000 before the fee caps at $20.

The maximum individual payout via PayPal is capped at $2,000, carrying a relatively small $20 fee.

Patreon charges a 5% fee on your monthly earnings through Commerce fees, plus additional taxes and fees. This fee is applicable to digital products sold through Patreon's platform.

Payment processing fees vary from country to country, usually falling between 2.9% and 5%. This fee is used to transport your money from a customer's wallet to a third-party payment processor.

Patreon charges a $0.25 payout fee per transaction for US creators. However, creators from other countries need to use PayPal, which charges a 1% payout fee, up to a maximum of $20.

The maximum individual payout with PayPal is capped at $2,000, carrying a relatively small $20 fee. This means that creators can earn up to $2,000 before incurring the maximum payout fee.

Intriguing read: Fundly Fees

To begin creating your Patreon page, head to Patreon's sign-up page and click the 'Create on Patreon' button. Decide whether you'd like to create a unique username and password, or log in with existing Facebook or Google credentials.

Next, fill in your details, including your legal name, the proposed name for your Patreon page, and whether your content contains anything explicitly sexual. This is for content safeguarding purposes.

Once you've completed these steps, you'll be on your way to creating your profile and building your Patreon page. You can add core details like a profile photo, cover photo, and Patreon description to get started.

Patreon is a secure platform for both creators and patrons.

To get started on Patreon, head to their sign-up page and click the 'Create on Patreon' button.

You can choose to create a unique username and password, or log in with existing Facebook or Google credentials.

Fill in your details, including your legal name, the proposed name for your Patreon page, and whether your content contains anything explicitly sexual.

This is for content safeguarding, so be honest and considerate of your audience.

Click 'Get Started' to head to your creator homepage and build your profile, adding core details like a profile photo, cover photo, and Patreon description.

You're still in the draft stage, though, so take your time and get your Patreon page off the ground.

Here are the steps to get started on Patreon:

Safety is a top priority on Patreon. Payments are handled by verified partners.

Patreon takes fraud seriously, with a 24/7 fraud monitoring system in place. This ensures that creators and patrons can trust the platform.

Failed payments are also a concern, but Patreon has a process in place to recover them. They go out of their way to get payments back on track.

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Patreon funding can be a game-changer for creators, providing a solid income stream if you have enough monthly subscribers set at the right price.

Patreon can bring creators closer to their fans, offering exclusive content and fan-only spaces that help grow communities and make patrons feel special.

However, it's not ideal for new creators, as it can be tough to drum up cash if you're starting from zero.

If you do decide to use Patreon, be aware that you're tied to the platform's rules, which can change at any time. This means you'll need to stay on top of any updates to avoid any issues.

Patreon takes a considerable cut of your earnings, so you won't take home the full amount. The exact cut isn't specified in the article, but it's mentioned that you'll take home a nice amount if you make a solid amount on Patreon.

To avoid any unwanted tax implications, be sure to double-check what your extra earnings mean for you and your taxes before you start using Patreon.

Patreon can provide a solid income stream, especially if you have a sizable number of subscribers set at the right price.

By offering exclusive content and fan-only spaces, Patreon helps bring creators closer to their fans, making them feel special and part of a community.

Having a Patreon page can also give you a reality check, showing you how many subscribers you have compared to your competitors, which might motivate you to improve your content.

Patreon's model is great for accountability, as you're in charge of delivering content and meeting quality thresholds, or else your patrons will unsubscribe.

Here are the benefits of using Patreon:

Patreon can be a great way to monetize your content, but it's not without its drawbacks. One of the main concerns is that it's not ideal for new creators, as it can be tough to drum up cash if you're starting from zero.

Patreon's rules are also something to consider. If the platform changes a rule or increases a fee, you're stuck with it. This is true for other platforms too, but Patreon's focus on creators offering content and goods for money makes it a bit more restrictive.

Patreon takes a considerable cut of your earnings, which can be a significant amount. You'll need to keep an eye on your earnings to avoid any unwanted tax implications, especially if you live in a place with complex tax laws.

Here are a few key drawbacks to keep in mind:

Overall, while Patreon can be a great tool for monetizing your content, it's essential to understand its limitations and potential drawbacks before getting started.