Substack invites its newsletter writers and others to invest, raising $5M+; source: the raise is an extension of Substack's $65M Series B in March 2021
AxiosSara Fischer
Context & Ripple Effects
Substack has turned its cap table into a community project: after quietly inviting newsletter writers to buy in with an initial $2M target, the writer-led extension of its a16z-led $65M Series B closed at more than double that. The move extends a funding arc that began with the 2019 Series A, when the platform counted just 50,000 paid subscriptions across its writers.
First-order effects
Thousands of Substack writers shift from being pure suppliers of content to co-owners, giving the platform a built-in constituency with a financial stake in its valuation rather than just its payout rates.
Second-order effects
Opening the round to non-accredited investors triggers crowdfunding disclosure obligations — Substack must publish financials it had kept private, exposing figures like its $22M net loss against $11.9M gross revenue in 2021 (crowdfunding-mandated financials).
Third-order effects
If creator-shareholder rounds become routine, the line between platform labor and platform ownership blurs — and the bet aged well enough that Substack later drew a $100M Series C at a reported $1.1B valuation (Chernin Group-led Series C).
The trend: Creator-economy platforms are converting their most productive users into shareholders, trading dilution for loyalty while crowdfunding law forces financial transparency.
The magic of Substack is the network of exceptional people who choose to join in. For ages, we've wanted to offer those people the opportunity to invest in Substack the company. Now, we've found a simple way to do that. https://wefunder.com/...
@pitdesi We'll be including financial statements when we file with the SEC in 1 - 2 weeks; at that point, reservation holders will be asked to confirm their investment.
Substack is about to generate $5 million in 24 hours by selling shares to its community. Not a bad way to extend its runway, even if I wouldn't invest myself https://www.platformer.news/ ... https://twitter.com/...
NEW: @substack doing a community fundraising round , allowing its writers to invest at a $2M goal - It's technically an extension of the company's $65M series B in 2021 - Pre-money valuation is $585M (same as series B) - The great @niubi is leading https://www.axios.com/...
What a fucking scam this is at their ZIRP valuation, this should be illegal or at least -ish, right? Do not invest at this valuation, I repeat, do not. https://twitter.com/...
Don't mean to call out substack specifically but generally you should ask why existing investors aren't investing. I'm in favor of community rounds when you invest at the same time as other investors - more likely they've done their homework, you can piggyback off of it.
My reason for investing in @SubstackInc is that normally writers never get any stake in their publishers. We're forever mercenaries. Getting to own a little bit of your publisher makes the relationship feel more symbiotic and aligned https://on.substack.com/...
And like I said over 2 years ago, I believe Substack will be a huge markdown in investors' portfolios The fact that they're still raising any money at this $650m valuation is pretty astonishing https://twitter.com/...
Investing in the generational company and cultural force Substack at ~$600m valuation is a huge bargain. I suspect it will fill up in the next hour! https://twitter.com/...
As an active angel investor in news, I have to say, you don't do it to make a lot of money. You do it because you want to help and be useful. Any Substacker considering this, should remember that and look hard at the valuation. https://www.axios.com/...
We think subscription networks are going to play a major role in the next chapter of the internet. They represent a step forward from social networks. https://on.substack.com/...
HUGE! 👀🤯 @SubstackInc is raising via @wefunder —the future is co-creation writers can invest and own a piece of Substack —2023 is for collective wins lots of new USEFUL features implemented recently have kept me bullish on this platform 👏 https://on.substack.com/...
Substack has been transformative for me, changing my life in ways I never could have predicted after decades working in traditional media. It's a great company, with a built-in, extremely supportive network/community. Yes, I ❤️ @SubstackInc. https://open.substack.com/...
We are serious about building Substack with writers, and this community fundraising round is one way to concretize that ideal. We're doing this because the dynamics of a platform like Substack change if the people who are building their businesses on it are owners of it too.
I like Substack but I will not be investing in this. They don't appear to be offering anything close to the level of transparency you get from a public company. Also, because it's not a public company it's not clear when investors would ever get a return. https://on.substack.com/…