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Unpacking what Substack's VC funding round means for media

30 March 2021
Dan Ackermann

"That's the first time I've ever seen someone write their own obituary." That's the text message I woke up to this morning, and it was more than a bit unsettling. First thing I did was look in the mirror to make sure I was in it, then back at the bed to make sure I wasn't there too. Then it hit me: "Oh, this is about Substack."

Driving the news: Last night we reported that the email newsletter platform is raising $65 million at a $650 million post-money valuation led by existing investor Andreessen Horowitz (A16Z).

  • Social media reaction was predictably mixed. Crowing from some of Substack's most popular writers, and complaints from some of its most ardent critics.
  • Some argued that this funding is less about Substack and more about A16Z's supposed desire to destroy traditional media. Thus the text message.

We'vewritten beforeabout Andreessen Horowitz's own media ambitions, and I've since come to two conclusions, from speaking to those familiar with the firm's thinking:

  1. A16Z isn't investing millions into startups like Substack or Clubhouse because it holds a grudge against the so-called mainstream media.
  2. A16Z does hold that grudge, so it won't shed any tears if its investments create second-order problems for legacy publishers.

The ordering is important, because it reflects how the investment thesis is primary.

  • Marc Andreessen has talked about how he believes the internet is now in its "third wave."
  • The first wave was when no one made or spent money online. The second wave was monetization via advertising. The third wave, he argues is direct-to-creator spend, via platforms like Substack, OnlyFans, Roblox or Cameo (which today announced $100 million in new funding).
  • In this framing, online advertising was a multidecade detour.

But, but, but: Advertisers will still want a place to pitch their wares. Plus, A16Z is more focused on "content" creation than "journalism" creation (yes, there's obviously a lot of overlap).

The bottom line: Reports of the media's death, and its killer, have been greatly exaggerated. But it makes for some great texts.

Transcripts show George Floyd told police "I can't breathe" over 20 times

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Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.

  • The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.

What the transcripts say:

  • Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
  • The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
  • Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."

Read the transcripts via DocumentCloud.