Patreon appears to be testing a new way of getting money to its community of creators, paying them advances on their earnings from their fan communities. It’s called Patreon Capital, and first news of it emerged in a report by podcasting industry site Hot Pod News.
“The service provides cash advances to creators in exchange for a slightly greater sum of their future income generated on Patreon,” it reported, citing the example of podcast production firm Multitude, which is one of the first recipients of the new financing, for its ‘Next Stop’ show.
“Patreon provided the team with a cash advance of around $75,000 to cover the production budget for the series, with the expectation for Multitude to pay back a slightly greater sum from Next Stop’s Patreon earnings over the next two years,” explained Hot Pod News.
“As a matter of risk mitigation, the Patreon revenues of another Multitude show, Join the Party, will be taken as collateral if Next Stop isn’t able to generate enough return to fully pay Patreon back after the two year period.” The report claims that Patreon has so far made “about a dozen” of these advances.
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