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I built a patreon competitor using stripe connect. It wasn’t super successful, had a handful of creators making $20-$100/month, but it’s definitely doable witho

by makeee 8y ago

I built a patreon competitor using stripe connect. It wasn’t super successful, had a handful of creators making $20-$100/month, but it’s definitely doable without a ton of legal work. Stripe makes it pretty easy. You can set it up so payments go directly from supporter to creator’s stripe account, with a percent going to you. If you want to batch payments or have more control over funds then you actually need to collect funds and do the payouts, which makes things a bit more complex. Feel free to email me if you want to chat. Honestly, dealing with payments is nothing compared to the amount of hand holding required to help creators set up a nice profile, pick good rewards, do a good job promoting their page, actually fulfill their rewards so they don’t lose backers, etc. It often took months of back and forth with creators to finally get their page launched. I’d avoid building a patreon competitor unless you personally know some very big creators (500k+ followers) or have a very specific niche in mind.

Kiro 8y ago
How did you handle taxes for the creators?
- chii 8y ago
  Why can't the creators handle their own tax?
  - asutekku 8y ago
    If there’s a possibility to not handle the tax i would use that service in a heartbeat. The less i have to do the better.
    - netsharc 8y ago
      Heh "Like Uber, but for tax accountants": attract tax experts from the creator's state/country to work for a percentage of their earnings. Does it get more complicated if the creator has donations from different states/countries? I have a feeling yes. Oh geez.
      - deanalevitt 8y ago
        There used to be exactly this, called Teaspiller. It was acquired by TurboTax.
  - Cu3PO42 8y ago
    It's not just the creators, it's also the backers. As soon as I am receiving something in return it's no longer purely a donation, but a purchase in some jurisdictions. This means, as a backer, I need to pay VAT (in Germany). There's a few options here: The service handles this for me, the creator does it or I do it. If the creator does it they now need to deal with the authorities in multiple countries, that doesn't work for any but the really big ones. If I do it, I now need to collect the receipts and list then on my tax return to pay the VAT. Or the service just takes care of it for me, like Patreon does. Honestly, if I had to deal with paying the VAT "manually" I don't think I would back anything.
  - seanwilson 8y ago
    > Why can't the creators handle their own tax? If you're accepting payments from the EU within the EU, you have to collect evidence of where the payer is from, pay different VAT amounts (i.e. different percentages per country) and have VAT paper work to prepare every year. It's time consuming, you're likely to make mistakes and that's only for the EU. For what it's worth, I use https://paddle.com/ https://paddle.com/ for a paid Chrome extension who deal with country specific tax for me. They're more expensive than Stripe though.
  - SkyPuncher 8y ago
    Financial intermediaries often have reporting duties in the US. However, there are several services that greatly automate the process.
- Cthulhu_ 8y ago
  I'm not a financial expert, but the creators have to do their own taxes (as earnings). However, what the 'paying' party in this case has to be able to do is give reports of payouts to the IRS (in various countries). Data retention is super important. Make sure to read up on that and your legal obligation on how long to retain that data - which may be decades.
  - fuzzybeard 8y ago
    As far as retention goes, that's going to depend on which data. The rules are different for different data. For financial information the general rule is 7 years. But that varies wildly on circumstance.
  - makeee 8y ago
    If you set the creator's Stripe account as the destination account when issuing a charge you can take a % and not be considered the paying party (don't need to send reports of payouts): https://stripe.com/docs/connect/destination-charges https://stripe.com/docs/connect/destination-charges
- makeee 8y ago
  Creators would have to handle taxes themself, no different than if it was their own site with custom stripe integration.

by makeee 8y ago

Kiro 8y ago

How did you handle taxes for the creators?

chii 8y ago
Why can't the creators handle their own tax?
- asutekku 8y ago
  If there’s a possibility to not handle the tax i would use that service in a heartbeat. The less i have to do the better.
  - netsharc 8y ago
    Heh "Like Uber, but for tax accountants": attract tax experts from the creator's state/country to work for a percentage of their earnings. Does it get more complicated if the creator has donations from different states/countries? I have a feeling yes. Oh geez.
    - deanalevitt 8y ago
      There used to be exactly this, called Teaspiller. It was acquired by TurboTax.
- Cu3PO42 8y ago
  It's not just the creators, it's also the backers. As soon as I am receiving something in return it's no longer purely a donation, but a purchase in some jurisdictions. This means, as a backer, I need to pay VAT (in Germany). There's a few options here: The service handles this for me, the creator does it or I do it. If the creator does it they now need to deal with the authorities in multiple countries, that doesn't work for any but the really big ones. If I do it, I now need to collect the receipts and list then on my tax return to pay the VAT. Or the service just takes care of it for me, like Patreon does. Honestly, if I had to deal with paying the VAT "manually" I don't think I would back anything.
- seanwilson 8y ago
  > Why can't the creators handle their own tax? If you're accepting payments from the EU within the EU, you have to collect evidence of where the payer is from, pay different VAT amounts (i.e. different percentages per country) and have VAT paper work to prepare every year. It's time consuming, you're likely to make mistakes and that's only for the EU. For what it's worth, I use https://paddle.com/ https://paddle.com/ for a paid Chrome extension who deal with country specific tax for me. They're more expensive than Stripe though.
- SkyPuncher 8y ago
  Financial intermediaries often have reporting duties in the US. However, there are several services that greatly automate the process.
Cthulhu_ 8y ago
I'm not a financial expert, but the creators have to do their own taxes (as earnings). However, what the 'paying' party in this case has to be able to do is give reports of payouts to the IRS (in various countries). Data retention is super important. Make sure to read up on that and your legal obligation on how long to retain that data - which may be decades.
- fuzzybeard 8y ago
  As far as retention goes, that's going to depend on which data. The rules are different for different data. For financial information the general rule is 7 years. But that varies wildly on circumstance.
- makeee 8y ago
  If you set the creator's Stripe account as the destination account when issuing a charge you can take a % and not be considered the paying party (don't need to send reports of payouts): https://stripe.com/docs/connect/destination-charges https://stripe.com/docs/connect/destination-charges
makeee 8y ago
Creators would have to handle taxes themself, no different than if it was their own site with custom stripe integration.