Reddit announced this week that they have just closed a $50 million round of outside funding lead by investor Sam Altman, with participation from Alfred Lin of Sequoia Capital and Marc Andreessen of Andreessen Horowitz.
It’s interesting to note that Altman is the President of Y Combinator, the incubator responsible for helping with the launch of Reddit. He’s a long-time fan and user of Reddit, and actually participated in an AMA shortly after this news broke.
The company explains what this new funding means for Reddit’s future:
reddit has had a long and complex history… During all of this time we have operated with a shoestring budget. This made us become efficient; it also meant that we were only able to work on essential features and were always understaffed. Even with the last year’s hiring (we’re 60+ strong now), we’ve found that there are still a lot more features you’ve been asking for that we haven’t always been able to get to as fast as we’d like.
Reddit intends to get to those features faster by using the money to hire more staff for product development. In addition, the company will also expand its community management team, build out better moderation and community tools, and work more closely with third part developers to expand mobile offerings.
The company believes that an investment such as this doesn’t mean they’re successful, and that they still have plenty of work to do. One of the things they have been working on is a way for the community to own some of Reddit. The investors of this round of funding proposed to give 10% of their shares back to the community, “in recognition of the central role the community plays in reddit’s ongoing success.”
Here’s the catch, they haven’t yet ironed out the details of how they’ll make it work, but they’re hopeful. The company says they’ll have more specifics to share soon, but still wanted to mention it in the meantime.
You could argue it’s a bold move for Reddit investors to say they’re going to give 10% of their shares back to the community without knowing how they’re going to do it. What do you think they might end up doing to fulfill their promise?
