On Substack

Today we’re starting a process that will let writers invest in Substack and own a piece of the company.

You can find the full details of this community round, which will also be open to non-writers if there is room, and make an investment via our page at Wefunder. We will accept investments from $100 up.

Invest in Substack

When we raised our last round of funding, in March 2021, we explored how we might make it possible for a large group of writers to invest alongside the traditional investors, but it ultimately proved too complex. Most importantly, it was difficult to include people who were not already accredited investors—a qualification determined largely by wealth. But the idea never left our minds.

We are serious about building Substack with writers, and this community 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. And we’re doing it because it not only provides something good for our company but also presents an opportunity for the people who use Substack to participate in the benefits that come from building this network—including the financial upside.

In recent years, doing a community round like this one has become more viable, in part because of a 2021 regulatory change that increased the limit for how much money could be raised in such a round, and in part because nascent companies like Wefunder make the process simple.

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We want to make it clear, however, that just because you can invest in Substack, it doesn’t mean you should. Investments are risky. There’s no guarantee you’ll make your money back, even if you’re investing in well-known companies and well-established industries. The risks are much greater when it comes to investing in startups, which have a habit of dying, pivoting, or simply not making enough money. Startups are high-risk, high-reward all the way through: for founders, employees, their family members, and for investors large and small.

Substack is a startup on an extremely ambitious mission, and success is far from guaranteed. You should not invest any funds in this community round unless you can afford to lose your entire investment.

However, for those who are interested in joining in this mission and perhaps owning a piece of it, we want to share how we think about Substack’s future.

Building a new economic engine for culture

The past couple decades of the internet have created a media system in which writing has been economically devalued and advertisers have been served above all others. These dynamics have led to an attention economy that coarsens public discourse, reduces trust, and strips readers of agency and writers of financial dignity. But while this internet-driven revolution has created a crisis for the media system, it has also brought opportunity.

We believe that the internet’s powers, married to the right business model, can be harnessed to create a much better media economy that gives more control to writers and readers, protects free speech and a free press, and promotes the creation of amazing works that wouldn’t have been possible in other systems. This is the work we have been doing at Substack in our effort to build a new economic engine for culture.

To realize this mission, we have to do much more than build good software. We have to build a new kind of network: one that unlocks the scale and democratizing power of the internet but is based on principles that give control to writers and readers. In such a network, the whole is greater than the sum of the parts. Each new person who joins Substack makes the network more valuable for everyone else.

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Today, more than 40% of all subscriptions and 15% of paid subscriptions on the platform come directly from the Substack network. This is happening because there are tens of millions of people active on Substack every week who understand what it means to subscribe to a writer, and they are open to discovering new voices and work. Industry observers have called Substack’s network effect an “unfair advantage.”

Networks win on the internet

When it comes to media platforms on the internet, there tend to be winner-takes-all effects. In its heyday, everyone was on Facebook because everyone was on Facebook. MySpace couldn’t compete. YouTube has become the dominant platform for user-generated video because it doesn’t make much sense to publish video anywhere else—the other platforms can’t match its reach. Instagram wasn’t the only photo-sharing app around in 2010, but it’s the only one that grew to a billion users. As the network scales, so do the platform’s capabilities, opportunities, and impact. And the larger the networks get, the greater their advantage grows.

Substack is a new type of network. We have been called a media company, a newsletter platform, and a social network, but none of those really fit.

Substack is a subscription network. We think subscription networks will play a major role in the internet’s next chapter. They represent a step forward from social networks.

While social networks are associated with advertising and attention, subscription networks are about direct payments and trust. While social networks facilitate shallow connections, subscription networks foster deep relationships. While social networks are about lock-in and platform ownership, subscription networks are about freedom to move and creator ownership.

In the space of five years, we have built a network around writing and podcasting that now encompasses more than 35 million active subscriptions, including 2 million paid subscriptions (keep in mind that most Substacks don’t have paid subscriptions activated). As Substack grows to accommodate more writers, podcasters, videomakers, musicians, scientists, and culture makers of all kinds, we see a path to hundreds of millions of subscriptions and a significant cultural impact.

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Join the ride

So, should you invest in Substack?

Remember, you shouldn’t just because you can. If you don’t have money to spare or you’re uncomfortable with risk, don’t spend your money on this.

Similarly, if you’re thinking of investing just because you might get a solid return, then you can probably find less-risky bets.

If, however, you share our belief that Substack can grow its financial impact with its cultural impact, and you want to be a part of what we are building, then it might be worth a shot. We are at the dawn of the era of the subscription network. We’re all going to be figuring this out together. The work will be ambitious and exciting, and it will be meaningful. We’d love to have you join us in building this new economic engine for culture.

Thank you, as ever, for helping make Substack what it is today. We look forward to working with you to make something amazing for tomorrow.

Edit: Thanks to everyone who committed to our Community Round. We’re going to close the round to new investors on April 20th. You can invest (or confirm your reservation) at https://wefunder.com/substack/

Invest in Substack

We are “testing the waters” to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder’s platform. Any indication of interest involves no obligation or commitment of any kind.