Creative Patronage Startup Patreon Raises $15 Million

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<re/code> | Liz Gannes | June 23, 2014

PatreonPatreon, the crowdfunding site designed by YouTube stars to fulfill their wish for a system of modern patronage, has found some big patrons of its own. Index Ventures led a $15 million Series A round for the just-over-a-year-old startup.

Patreon has processed $2 million in pledges since May 2013 for its 25,000 creators, $1 million of that in just the last two months. Half of its users are YouTube video makers; the rest are comic strip artists, podcasters and writers. They all have their own fan bases that love them so much they guarantee recurring revenue.

The way the site works is this: Fans pledge a certain amount of money every time a unit of work is created — say, a single video. The average Patreon pledge is $7. For example, the a cappella group Pentatonix brings in $12,000 per video, guaranteed. The “Postmodern Jukebox” video maker Scott Bradlee was Patreon’s top grosser last month, because he puts out four videos per month and makes $3,900 per video.

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The band Pomplamoose, half of which is Patreon co-founder Jack Conte, now makes more than $5,000 per video. Since Pomplamoose’s average video costs $300, and the band puts out two to three videos per month, Conte has not been taking a salary from Patreon. “They’re practically free,” said Conte, who has developed elaborate projection techniques and music video concepts that are complicated but not expensive.

Conte’s said his main concern in raising the round was pissing off the Patreon community. “Because we’re so cognizant of how venture capital can also be a dangerous thing, we do want to make sure our creators know how thoughtful this round was,” he said. “We spent a long time meeting a lot of folks.”

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