🚒 Raising From Your Community

This week I discuss Substack raising on Wefunder, how newsletter revenue is bucking the trend, and how chat.com looks like a top 5 domain sale of all time

Together With

Hey there 👋,

In this week’s newsletter, I discuss:

  • Substack raising from its community

  • Antifragile newsletter revenue

  • Did a top 5 domain sale of all time just go down?

And please check out our new sponsor this week, 360 Wall St, as sponsorship is a key revenue component for this newsletter.


🧯 Will $5M help Substack’s burn?

As you know I’m a big fan of Substack, they helped me build and sell a six figure paid newsletter back in 2020, and even as late as last month I was still a firm believer in them.

But then I tried beehiiv and quickly moved my newsletters over (consolidating from 6 to now 3). It was clear to me the growth benefits of being on beehiiv vs Substack, and it was worth paying for.

Substack is still free, unless you run paid subscriptions where they take a 10% rake. However, in my experience, paid subs do not work anywhere near as well in 2023 as they did back in 2020. Most newsletter operators will have to run sponsored ads and/or develop their own one-off products instead.

So it wasn’t surprising to see them announce yesterday that they were raising funding again, but to do it via Wefunder certainly was. In my experience of equity crowdfunding (which launched here in the UK a long time before it was allowed in the US) the vast majority of companies on the platforms are there because they couldn’t raise from anyone else.

Many on Twitter think the valuation is extremely high and unfair on their community:

It’s now raised over $5M on Wefunder, but that doesn’t really feel material to the over $82M they’ve raised so far, according to Crunchbase.

And Elizabeth Lopatto at The Verge just published a post stating how Substack looks desperate in hitting up retail investors:

I dislike this framing because it hides something important from the audience it is targeting. If you received this email, you may already be a newsletter writer using Substack for your income. Increasing your exposure to Substack by investing means that if the company folds, first, you gotta figure out how to move your newsletter to keep the money coming in, and second, you lose your investment.

You can read the full post here:

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🧱 Antifragile Newsletters

The Online Ad Revenue Index by Ezoic shows that ad rates peaked back in November 2021 and have been falling since, down over 30% vs this time last year:

However, newsletter publishers are actually seeing an uptick in ad revenue despite the overall advertising slowdown, reports Sara Guaglione from Digiday:

The Gist, 1440, Industry Dive and The Ankler are continuing to run profitable businesses and are not seeing the impact of the advertising slowdown on their revenues.In fact, ad revenue is continuing to grow so far this year at newsletter-focused businesses, as are newsletter subscribers.

Newsletter operators are saying that they are winning over advertisers who have wanted to pull back on brand awareness ads and shift to direct response campaigns.

This is definitely the trend in the industry. The newsletter sponsorship platform Swapstack started with 1:1 relationships between advertisers and publishers before moving to an affiliate deal model and most recently pay per click.

You can read more in the Digiday report below:


💬 8 Figure Domain Acquisition

Dharmesh Shah, Founder and CTO at HubSpot just tweeted that he acquired the domain chat.com:

In a post on Linkedin he explains the domain was an 8 figure deal that he purchased personally:

The reason I bought chat.com is simple: I think Chat-based UX (#ChatUX) is the next big thing in software…

chat.com is absolutely brilliant in terms of simplicity, shortness and being totally on point and meeting the moment. It immediately creates user trust. Somebody (not me) will build a massively successful product/company on it.

According to Namebio, this puts the domain purchase in the top 5 of all time:


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Ok, that’s it from me, until next week, be well and share this newsletter to get my referral rewards:


Richard Patey - @richardpatey

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Disclaimer: Nothing in this email is financial advice and I am not a professional investment adviser. I send weekly updates on digital asset news and what I'm doing personally - consider it informational and for entertainment purposes only. This newsletter is monetized through sponsorship and affiliate revenue.

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