Is Substack really worth $650M?
Something is worth what someone is willing to pay for it, and apparently investors are willing to pay $65M for 10% of Substack. This begs the question: how much have they given up along the way to raise that money?
The media coverage never calls this out, but it’s right there if you just do the math:
$65M at $650M valuation = 10% – OK, not too bad, on its own.
$17M at $49M valuation in July 2019 = 35%!
$2M seed round in April 2018 at unknown valuation = ? (not made public, not available on Pitchbook)
$125K Y Combinator pre-seed round – 7%
Simply put, they’ve lost control of their company already, and they may not even be done yet. TBD.
We hate to see this, especially when there’s a better way.
Is Substack really worth $650M? – TechCrunch
Substack didn’t invent the paid newsletter, but the startup’s early success with the model is enticing previous backers to more than double down on the media startup.