The Fee Funnel That Funds Prop Firms
Prop firms sell a paid exam with a payout attached. Customers pay a fee — from $50 to a few thousand dollars — to trade a simulated account. If they hit a profit target, usually around 10%, without breaching a drawdown limit, they become "funded" and keep a share of profits, typically 80%. The economics rely on fees from failures exceeding payouts to winners. The fee funnel is the foundation of the business.
Pass rates are low. FTMO, a Prague-based firm, ran $329 million in revenue in 2024 across 2.3 million open accounts and has paid out more than $450 million to traders over its ten-year life. Community estimates put FTMO's Phase 1 pass rate at about 8%, and only about 7% of all entrants collect a payout. Topstep, a futures-focused firm, reports 16.8% pass the 2025 Combine and 33% of funded traders collect payouts. A study by FPFX Tech shows 7% of 300,000 accounts collect payouts. The Funded Trader's CEO says 1-2% of all clients collect
