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Patreon now gives developers cash advances on their subscription money



Patreon, who is loved by the creators of the website for helping them make money from their work, has started a program called Patreon Capital that grants microloans to creators. It's essentially an advance: you now get cash in return for part of your future earnings plus a small bonus. It's different from Patreon's usual business, which allows direct subscriptions to people whose work you like and then cuts off the top. However, it will diversify the company's revenue, which should make Patreon a more sustainable business.

As Nick Quah's newsletter Hot Pod reports:

[G] Because of its history and positioning as a developer support platform, Patreon believes that they are in a better position than banks to provide developers with the business support they need , “After all, Patreon has access to all the data about a creator's earnings history, what it offers as an advantage, how much it brings into contact with its customers … everything that is necessary to forecast its earnings and commitment, without a creator making any application must face. Said Carlos Cabrero, VP of Finance for the company. "This would be essentially impossible for a bank to replicate."

The historical performance of a Patreon creator ̵

1; in terms of subscribers and earnings – is definitely more transparent than credit reports. And, as Quah astutely observes, the program is modeled on other similar offers from Shopify and Stripe.

But that's not why the program started. Patreon Capital exists because Patreon itself is a company that pays a significant portion of the money to the people who populate its platform. "The reality is that Patreon needs to build new companies, new services, and new sales lines to build a sustainable business," the company's CEO said in an interview last year in which it paid its developers more than half a billion dollars.

Every business is different, but everyone has the same blood: money. (It's just another way that companies really aren't human, no matter what Citizens United says.) Like any other company, Patreon needs to find its way to sustainability, just like any other developer on its platform. In other words, Patreon needs more blood, which means that Patreon Capital is probably better off as a necessary transfusion.


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