The problem is not if Patreon is making enough profit to satisfy investors. The problem is if they don't. The reasoning goes as follows: VCs are chasing the next Google, and if Patreon cannot grow enough there is a real risk that it will die/resort to shady business practices by trying too desperately to achieve this growth. Without VCs it could remain a healthy, profitable, medium-sized company...
Exactly. It's the devil's bargain that you make when you take venture capital. VC is a hits-driven business. If it looks like you'll only be a moderate success, they will push you to take risks and spend more money in hopes of being giant. That will push up your odds of total failure and worse.
Like, okay, Patreon has a staff of so many people for development, so many people for admin/moderation, and they have offices, and hosting, and whatever other costs I'm not thinking of. And all of those things need to be paid. I'm quite happy to give them a few bucks for every page of comics I draw in exchange for them making this lovely system to funnel money to myself and other creators, and keeping it running.
But the core mission of Patreon is "nothing short of helping every creator in the world achieve sustainable income. We’re making this happen by building the best platform for creators to make money, run their creative businesses, and connect with the fans who matter most." (Taken from their careers page, https://www.patreon.com/careers)
Once all those above costs are met by skimming off a small percentage of the money going through their setup, what do they do with that money? Do they start lowering their cut? Do they start donating it to charities? Fund other weird business ideas? Or just pay back the people they've borrowed money from, who won't be satisfied by anything but huge returns?
I know Kickstarter's built itself into a "public benefit corporation", which makes it explicitly bound to consider things aside from "how much money will this make regardless of other costs"; Patreon makes similar noises but I don't believe they've taken the step of formalizing this yet. And I would be delighted to find out I'm wrong on that.
They should make whatever profit they can; but the concern is that they will be pressured by external investors to make more profit that they can sustain.
It's the Tiger Woods problem, also known as Focus on Your Core: TW gets video game endorsements and makes ungodly piles of money because he's a great golfer. When he focuses on making new games and supermodels instead of golfing, his game suffers and all the perks that came because of the good golf game go away.
...Like how he hasn't had his name on a golf video game in years.
Essentially: pursuit of profit when it undermines your core competency is shortsighted.
