Patreon’s Cash Advance Creator Program Explained: Key Takeaways From Today’s AMA Reddit | Billboard

Conte kicked off the AMA by noting that the Patreon Capital program is in “very early development” and has so far only disbursed loan money to “a few” creators. He then further explained the reasoning behind the program, referring to an article he posted on Patreon’s messaging platform Discord on Thursday. In this article, Conte wrote that the concept of Patreon Capital stemmed from his personal experience: as a freelance musician 10 years ago, he said, he was forced to fight over a mortgage – all of it. because he was unable to provide the bank with official pay stubs reflecting his income.

“From that experience, I have dreamed of a world where creators are valued and respected as legitimate members of the workforce, with the same privileges, benefits and access as anyone who is ’employed’,” said Conte’s post continued, adding, “Like whatever we do, the most important thing is that we apply our culture of centrism on the creators, our focus on the creators and our priority on the creators to think and execute. It’s all in the details – and I promise you that we will first be thoughtful, careful and creative in how we build and approach it.

For his part, Cabrera agreed with a Reddit user who suggested that Patreon Capital was similar to Paypal’s working capital program – albeit with lower start-up costs – and noted that Patreon was also studying d ‘other programs, including Shopify Capital and Square Capital.

Below are some other key elements of today’s WADA.

They are not loans.

Cabrera hit back at the suggestion that Patreon Capital is a loan program, noting instead that the money “will be structured as an advance on a creator’s Patreon income in exchange for a fixed amount.” He also rejected any comparison to payday loans, saying that no interest accumulates and fees do not increase on Patreon advances, no matter how long it takes for creators to pay them off.

Cabrera added that no outside collateral is ever required and that there is no legal recourse for Patreon to recoup its investment. “If the creator never earns enough to repay the amount, then Patreon bears the loss and the creator can simply waive the deal,” he wrote.

The fee is determined by how much a creator is willing to withhold from their Patreon earnings up front.

“Reimbursement rate: the proportion of a creator’s net Patreon income that the creator would like to withhold from their Patreon income,” Cabrera wrote. “The higher the reimbursement rate, the lower the fees. “

Conte added that the fees will generally be lower than what creators would be charged by comparable services thanks to the immense amount of data the platform keeps on its users. “We are able to offer creators a much better deal than they could get elsewhere, because we have such a solid understanding and history of their income through Patreon,” he wrote. “It gives us a ton of confidence in their trajectory.”

Advances can be up to four times a creator’s Patreon income.

“The program is just getting started, but I think we’ll generally offer between 0 and 4 times a creator’s monthly income,” Cabrera said.

Patreon will not take any equity in exchange for the Advances.

“Note that Patreon does not own any part of a creator’s company or its content,” Cabrera said. “Creators retain all ownership rights to their content. “

The company may offer one-time donations to creators later this year.

Although he remained enigmatic, Conte wrote that Patreon was looking to introduce “an early version of something like” the gifts later in the year. “It’s not exactly a ‘one-time payment’, but it [sic] I think it might fix the same problem – and of course, as far as future iterations go, we’ve heard this feature ask a lot, so it’s definitely on our list.

They will consider expanding the Patreon Capital program in the future.

“Over time, we could open the program so that there is no application at all; you can just get an advance on your Patreon earnings, for all intents and purposes, as long as you like the terms, ”Cabrera wrote.

You can read the full AMA here.


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