I got excited — very excited — when I found out that Substack’s equity crowdfunding effort would result in it releasing financial results.

Sadly, due to rules and the timing of the fundraise, Substack is not required to detail its financials for 2022, and so the startup released hard data for 2020 and 2021 along with certain user-specific metrics for last year. This provides an interesting, if incomplete, picture of the company’s health.

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I expected to spend some time this morning weighing in on the morality of Substack’s choice to not share its audited 2022 results, but Dan Primack nailed that argument this morning in Pro Rata. Since I can’t improve on his words, we can leave that point to Axios and instead focus our fire on parsing the data.

So to kill time while we nurse our post-Y Combinator Demo Day hangovers, let’s dig into Substack’s growth model (inclusive of its most recent nonfinancial data), ponder over the company’s current financial health, and then compare its upcoming capital raise to its potential cash needs.

This will be fun. Think of it like a quick look at a partial S-1 filing but for a Series B company. Sound good? To work!

There’s a lot of data, but not enough

You can read all of Substack’s released financial results here in case you want to play along.

To start, let’s note that the company raised lots of money through 2021 to invest in its platform and grow its user base. So while we consider its results through 2021, it’d be wise to remember that the company was growth-oriented at the time. How did that work out?

Substack’s growth model is expensive, if effective

Substack’s gross revenue scaled by over 400% to $11.9 million in 2021 from $2.4 million in 2020. That’s precisely the sort of top-line expansion that venture backers want to see from a startup in its investing cycle. The company had announced its massive $65 million Series B in early 2021, meaning that it had access to that cash in the year.