FILED: NEW YORK COUNTY CLERK 02/23/ :06 PM INDEX NO /2017 NYSCEF DOC. NO. 90 RECEIVED NYSCEF: 02/23/2018 EXHIBIT TWO

Size: px

Start display at page:

Download "FILED: NEW YORK COUNTY CLERK 02/23/ :06 PM INDEX NO /2017 NYSCEF DOC. NO. 90 RECEIVED NYSCEF: 02/23/2018 EXHIBIT TWO"

Ethan Shelton
5 years ago
Views:

1 EXHIBIT TWO

1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch News Video Events Crunchbase Subscription art crowdfunder Patreon confirms $60M fundraise Posted Sep 19, 2017 by Josh

2 1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch News Video Events Crunchbase Subscription art crowdfunder Patreon confirms $60M fundraise Posted Sep 19, 2017 by Josh Constine Patreon upgrades content creation from a passion to a profession by paying artists 95% of subscription payments from fans instead of 55% of skimpy ad revenue like Facebook and YouTube. Now Patreon itself is getting paid with today s official announcement of the big Series C funding round TechCrunch broke news of last week. Patreon has raised $60 million led by Chris Paik at Thrive Capital which also led its Series B. As we reported, Index participated in the round that two sources told us value the startup at around $450 million. The Series C also includes existing investors CRV and Freestyle, plus new back Draper Fisher Jurvetson via partner Barry Schuler. The funding brings Patreon to a total of $107 million raised. The new capital will go towards hiring to expand its 80 person team and scaling up growth by recruiting more creators including videographers, political pundits, game developers, illustrators, musicians, and comedians. Patreon s business is doubling in size each year across metrics like creators on-boarded and paying subscribers, and it expects that grow to continue. Patreon already has 50,000 creators and 1 million subscribers on the platform that pay an average of $12 per month. 1/10

1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch Over the last 15 years, distribution has been democratized and pretty much solved Patreon co-founder Jack Conte told

3 1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch Over the last 15 years, distribution has been democratized and pretty much solved Patreon co-founder Jack Conte told TechCrunch in June. Unfortunately in that process, global financing for the arts has gotten into jeopardy. While once only the top musicians or artists could sell their work in stores or on tour, the internet helped niche creators find their audience. But trading sales for ad-supported streaming and social media made it tough for anyone but the most established artists to earn a living wage. Patreon s tiny 5% cut of subscription revenue is highly attractive to creators who are used to a much smaller share than 95% (minus credit card processing fees). Both YouTube and Facebook s new Watch tab of original video content only pay out 55% to creators. Patreon s needling of YouTube over its weak ad revenue payouts may have hastened YouTube s launch of sponsorships that lets fans pay $4.99 a month for bonus features and access to exclusive live chats with creators. 5% is a philosophically important mark says Conte. When we pitched the Series B, some of [the investors] didn t get it, and some of them did. While Patreon might have been able to get away with charging 10% or 15%, the low rake incentivizes creators to funnel fans from other platforms like YouTube, Facebook Instagram, podcasts, and blogs to Patreon where they can more effectively monetize them. 2/10

FILED: NEW YORK COUNTY CLERK 02/23/2018 07:06 PM 1/28/2018 Subscription art crowdfunder Patreon conﬁrms $60M fundraise TechCrunch NYSCEF DOC. NO. 90 INDEX NO.

4 FILED: NEW YORK COUNTY CLERK 02/23/ :06 PM 1/28/2018 Subscription art crowdfunder Patreon conﬁrms $60M fundraise TechCrunch NYSCEF DOC. NO. 90 INDEX NO /2017 RECEIVED NYSCEF: 02/23/2018 Co-founder Jack Conte launches Patreon after being up for 48 straight hours in 2013 [Correction: Conte wasn t hungover, just realllly tired.] Conte s allegiance to creators stems from being one himself. He launched Patreon in 2013 after pouring his savings into making an elaborate music video, and not earning enough back through YouTube ads to cover his costs. He knew that no matter how obscure an artists was, there were at least a few people who loved them and would pay a lot more than the fraction of a cent they d generate viewing ads. The mobile game industry earns most of its money from hardcore players called whales, and Conte wanted to leverage the same model to fund art. Some creators like political commentators Chapo Trap House earn over $80,000 per month via Patreon. Dozens of creators earn over $30,000 per month. Even smaller artists can pull in a few hundred dollars per month, which goes a long way towards them making rent and being able to pursue their creative inspirations instead of taking a part time job. And unlike releasing the occasional album or book, or using project-based crowdfunding platforms like Kickstarter, Patreon provides a reliable paycheck. 3/10

1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch But to become a truly successful business and justify its new validation, Patreon will either need to grow much

5 1/28/2018 Subscription art crowdfunder Patreon confirms $60M fundraise TechCrunch But to become a truly successful business and justify its new validation, Patreon will either need to grow much larger, or boost the amount it earns. Right now despite its success, it s only on track to earn $7.5 millon in revenue off the $150 million to creators this year. Currently all the fundraising tools Patreon offers are included in its 5% fee. That includes its new membership engine and its version of Snapchat that s only available to a creator s paying subscribers. The funding could help Patreon develop new premium tools for creators that they d pay extra to use. Those could include ecommerce functionality for selling merchandise or event tickets, enhanced analytics and CRM features, or new ways to communicate with fans. Patreon will have to figure out how to fairly promote different creators without playing favorites or merely amplifying the already-popular artists on its platform. It will also have to draw tough lines about free speech vs decency, allowing off-kilter creativity without permitting hate speech to proliferate. But as online ad platforms tighten their restrictions over what content is allowed, Patreon has found a way to help artists to earn a living by being themselves. They don t have to sell out to corporate sponsors. They don t have to change their style in hopes of going viral. They just have to make art that truly touches the hearts of a few people scattered across the world. Featured image by Miranda Harmon (follow her on Patreon), remixed by Josh Constine FEATURED IMAGE: MIRANDA HARMON 4/10

6 EXHIBIT THREE

1/28/2018 Patreon Crunchbase Products Resources News About LOG IN REGISTER SEARCH Companies People Investors Funding Rounds Acquisitions Schools Events Patreon Twitter View on Twitter Contact Email

7 1/28/2018 Patreon Crunchbase Products Resources News About LOG IN REGISTER SEARCH Companies People Investors Funding Rounds Acquisitions Schools Events Patreon Twitter View on Twitter Contact Phone Number (714) Patreon is a membership platform that makes it easy for artists and creators to get paid. It operates a platform that enables content creators, as well as artists, to be able to fund their work. It's Patron.com, a communications platform, enables connection between users and makes various accessible content, including videos, photographs, images, artwork, graphics, audio clips, comments, data, text, software, scripts, projects, other material and information, and associated trademarks and copyrightable works. Patrons pledge to support artists and creators on a recurring basis for each work created, empowering a new generation of creators the ability to make a living off of their passions. Collapse Funding Rounds My Searches My Lists Number of Funding Rounds 4 Featured Add New Pro le Total Funding Amount $107.1M Data Solutions Announced Date Transaction Name Number of Investors Money Raised Lead Investors Sep 14, 2017 Series C - Patre 5 $60M Thrive Capital Jan 16, 2016 Series B - Patre 6 $30M Thrive Capital Jun 23, 2014 Series A - Patre 13 $15M Index Ventures Aug 1, 2013 Seed Round - P 9 $2.1M Crunchbase Enterprise Enrich your accounts with veri ed company data: descriptions, funding & more. GET STARTED Investors Number of Lead Investors 2 Number of Investors 22 Investor Name Lead Investor Funding Round Partners Index Ventures No Series C - Patreon Thrive Capital Yes Series C - Patreon Chris Paik About Terms Careers Sitemap Editorial Partners: Oath Tech 2018 Crunchbase Inc. All rights reserved. Draper Fisher Jurvets No Series C - Patreon Barry Schuler CRV No Series C - Patreon Freestyle Capital No Series C - Patreon 1/1

8 EXHIBIT FOUR

9 2/21/2018 Entity Information NYS Department of State Division of Corporations Entity Information The information contained in this database is current through February 20, Selected Entity Name: THRIVE CAPITAL MANAGEMENT, LLC Selected Entity Status Information Current Entity Name: THRIVE CAPITAL MANAGEMENT, LLC DOS ID #: Initial DOS Filing Date: SEPTEMBER 22, 2011 County: NEW YORK Jurisdiction: DELAWARE Entity Type: FOREIGN LIMITED LIABILITY COMPANY Current Entity Status: ACTIVE Selected Entity Address Information DOS Process (Address to which DOS will mail process if accepted on behalf of the entity) THRIVE CAPITAL MANAGEMENT, LLC 295 LAFAYETTE STREET SUITE 701 NEW YORK, NEW YORK, Registered Agent NONE This office does not require or maintain information regarding the names and addresses of members or managers of nonprofessional limited liability companies. Professional limited liability companies must include the name(s) and address(es) of the original members, however this information is not recorded and only available by viewing the certificate. *Stock Information 1/2

10 2/21/2018 Entity Information # of Shares Type of Stock $ Value per Share No Information Available *Stock information is applicable to domestic business corporations. Name History Filing Date Name Type SEP 22, 2011 Actual Entity Name THRIVE CAPITAL MANAGEMENT, LLC A Fictitious name must be used when the Actual name of a foreign entity is unavailable for use in New York State. The entity must use the fictitious name when conducting its activities or business in New York State. NOTE: New York State does not issue organizational identification numbers. Search Results New Search Services/Programs Privacy Policy Accessibility Policy Disclaimer Return to DOS Homepage Contact Us 2/2

HERE S WHAT I M GOING TO TEACH YOU

2 HERE S WHAT I M GOING TO TEACH YOU Have you been struggling to find a way to build your very own business on the Internet? If you re like me (and countless other people around the world) you ve likely