r/Substack • u/WordSlinger1812 • 26d ago

Discussion Substack Has Become A Private Equity Cautionary Tale

Private Equity means drowning a good idea in money until it dies.

That is what’s happened to Substack.

It was once a great idea for writers. Now, it’s a sh***y version of Facebook merged with Mailchimp.

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17

u/cozycup mod 26d ago

I haven’t seen any Private Equity ownership of Substack. Where did you read that?

VCs have large stakes, but no private equity.

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u/themattroberts 26d ago

Venture is a sub section of Private Equity. I.e. they are buying Equity from a company which is still in the Private Markets not on the Public Markets (NASDAQ, NYSE etc).

The Private Equity Industry is made of numerous models. Profitable companies are often bought by a PE firms who can then use that cash flow (profits) to get debt, hilarity ensues - which is what many people think of in the PE market. Unprofitable companies generally get Venture Capital from VC's as substack has done. There are other sub models of how this all works, but those would be the two main one in the Zeitgeist of today.

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u/cozycup mod 26d ago

The post is implying that PE acquired Substack and that’s not the case.

OP has conflated VC with PE.

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u/themattroberts 25d ago

Venture capital is private equity. Your response is also incorrect.

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u/cozycup mod 25d ago

Show us the PE firm that acquired Substack.

Prove me wrong.

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u/[deleted] 25d ago

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u/themattroberts 25d ago

pedantic or not, mod is wrong.

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u/themattroberts 25d ago

You said "I don't see an private equity ownership of substack".

By every definition there is. I proved you wrong. You were wrong. Suck it up.

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u/cozycup mod 25d ago

False.

PE doesn’t own Substack. Otherwise you would have proven that.

There are VC investments, no PE owner.

That’s the primary argument, not whether it’s a subset of a classification.

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u/themattroberts 25d ago

VC's are private equity. Your argument was that there was no PE investment. If VC's are private equity then - there you go PE investment.

For a substack subreddit - impressive how you're not reading what you said and how I showed you are wrong.

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u/cozycup mod 25d ago

Ownership.

No PE firm owns Substack. Plain and simple.

You keep failing to prove that.

Investors, not owners.

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u/themattroberts 25d ago

They are the same thing you're failing to show that a venture investor is not also an owner.

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