Substack, the email newsletter subscription business, today announced it will allow its writers and creators to invest in its startup starting at $100 and increments thereof.

Substack is looking to raise $2 Million at a pre money valuation of $585 Million.

They have 2 million paid subscribers, and 35 million subscribers, allowing for $300M to be paid to writers (their goal is writers keep 86% of the money earned from subscriptions).

You do not have to be an accredited investor (have over $1 Million in liquid assets) to invest in the round, and can invest at least $2200 or even start at $1000.

I think the valuation at $585M is rich, relatively speaking but I dont know all the numbers.

Here are some assumptions based on the data provided:

1. They are probably doing $150M to $200M in overall revenue given they have paid $300M overall to writers and have 2M paid subscribers. At an average of $7 per month per subscriber, it rounds up to $168M LTM (Last Twelve Months).
2. Their take is 10% or about $15M to $20M, which is their “actual revenue).
3. The growth rate seems tremendous, which I am assuming is over 100% YoY given 2 years ago they had only 100K paying subscribers.
4. So $20M in revenue, growing at over 100% YoY and you are paying 25X to 30X in Market Cap to Sales – Very rich, but this is the private market. They still are probably stuck in 2021 valuations.