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Last week, after ABC News effectively fired veteran correspondent Terry Moran over his late-night fit of pique against President Trump and deputy chief of staff Stephen Miller—“It wasn’t a drunk tweet,” he told the Times, unsolicited—the longtime broadcaster followed a familiar routine: He announced that he would be joining Substack. Moran is the latest in a string of veteran political journalists who have sought refuge on the D.I.Y. digital publishing platform after being defenestrated, or delicately nudged toward the exits, by mainstream institutions. Others include CNN vets Don Lemon and Jim Acosta, NBC alumni Chuck Todd and Joy Reid, and former Politico scribe Ryan Lizza, whose defection, which he marketed as a truth-to-power move, was in fact forced by his former employer. The talent migration is obvious fodder for journalists-going-it-alone trend stories—and, indeed, there have been a few. It has also fueled a broader media narrative about Substack’s growing relevance at a time when much of the legacy news infrastructure seems to be crumbling in plain sight and social media platforms are becoming increasingly toxic. Last month, the company announced it had added more than 1 million paid subscribers since Trump’s election last November, bringing their total paid subscriber base to more than 5 million. “The platform has benefited from an influx of traditional media executives, such as former CNN star Jim Acosta, drawing in new audiences,” the FT noted at the time. (They’re not media executives, of course, but whatever.) Meanwhile, Substack co-founders Hamish McKenzie and Chris Best have been on the fundraising circuit. On Tuesday, Eric Newcomer, himself a Substack journalist, reported (on Substack, of course) that the founders had been pitching investors on “a round between $50 million and $100 million that would value it above its roughly $700 million last-round price.” That’s consistent with what I’ve been hearing in recent days. And, as Eric also reports, Substack is telling investors that it’s generating about $45 million in annual recurring revenue—10 percent of the roughly $450 million in subscription revenue going to the platform’s creators. (A Substack representative declined to comment on these figures or make the founders available for an interview). These numbers warrant some scrutiny. Four years ago, in March 2021, Substack raised a Series B round led by Andreessen Horowitz at a $585 million pre-money and ~$650 million post-money valuation. Two years later, it invited writers to join a raise at the same $585 million valuation—not the most encouraging call for fresh capital. Since then, its only capital infusion came in November 2024, when it quietly raised around $10 million from individual investors including Omeed Malik, Nate Silver, and Mark Pincus. No valuation was given at the time, though I’m reliably told that it once again stayed flat—which may explain why Substack hasn’t disclosed its numbers in recent years.

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Whatever the case, the math here seems flawed. At $45 million in annual revenue, Substack would need to assume a roughly 16x multiple to justify even a $700 million valuation—which is not only extremely generous for a media-adjacent company, but also far smaller than its last proper funding round, where revenue was lower and the multiple was higher. Indeed, this new raise could be a down to flat round by another name, all at a terrible time in the market. Leaking the news about flying term sheets and potential big investors like Benchmark’s Bill Gurley—an a16z nemesis—actually reads like a somewhat desperate marketing plea. When real deals come together, of course, people tend to go silent.

Substack, in many ways, reflects the zeitgeist of its media moment. Like Xerox or Kleenex or even Google, its own company name became a shorthand for the task it provided. And yet, what was that task, exactly? Was Substack a home for recently-fired or disenfranchised media people? Was it a hobbyist’s lair, as Medium had once been, for modern freelance writers? Or was it a chew toy for angry neophyte amateurists eager to espouse their views and dabble in the writing trade? The truth, perhaps, is that it reflected all of this and more. Publishing has never been a hospitable business. For every Michael Lewis, there are a few thousand freelancers dreaming of their first published piece. And on a zero-barrier platform where anyone can become a writer, Substack always seemed likely to produce a few Bari Weiss, Casey Newton, and Emily Sundberg types, and many, many more who envied them. Alas, the diverse quality and categories of top creators has presumably made it increasingly difficult for Substack to build an advertising team that will run programmatic units or direct sold creative across its writer-partners, particularly given brand safety issues. Regardless, one of the hallmarks of startups is that companies inevitably reflect the manner in which they are financed. And while Substack looks like a writing platform—and God love ’em for being one—Hamish & Co. would prefer Substack to be valued like a tech company. The problem there is that they don’t actually have a truly differentiated technology, but rather a publishing product that Google, Microsoft, or Meta could challenge in a heartbeat. (As Eric noted, “Substack decided its fate when it joined us poor souls in the media business, and has had its valuation held down as a consequence.”) Axios, the original popular email media company, seemed to grasp the possibility of monetizing the format when it sprung up its HQ business—a professional software tool for corporate clients. But Substack was the first to arrive in the consumer space. And while industry insiders tend to associate the platform with their enterprising friends and former colleagues who have built durable businesses, the truth is that the vast majority of the content on Substack is boring, amateurish, or batshit crazy—armchair financial analysts, second-grade teachers from Iowa, aspiring home cooks, MAGA freaks, etcetera. Meanwhile, the stars of the ecosystem who take in the bulk of the subscription revenue could all very easily go elsewhere at any time, or simply use a rival publishing platform. Oliver Darcy is building out his shingle, for instance, on Beehiiv. To maintain its current roster of talent, of course, Substack will need to invest in editors, marketing, design, legal support, research, etcetera—you know, the provincial tools of the media trade. One wonders whether those expense items are listed out in the pitch. Anyway, all this would be fine if Substack hadn’t raised so much money. Instead, Hamish & Co. are now looking at a situation where, after this raise, they’ll have pulled in at least $150 million with $45 million in annual revenue—an outcome that lowers their position in the waterfall, dilutes their equity, and potentially disincentivizes them from the real payday that founders, beneath the pablum, launch businesses to achieve. Who are the buyers for the business at that price? Substack may be telling Newcomer that investors are interested in the company’s app, which features a Twitter-like short-burst product, but $50 million to $100 million would represent the largest capital infusion in a text-based startup media company since The Messenger. That’s counterintuitive, to say the least. As for the Morans, Acostas, and Lizzas who recently migrated to the platform—well, now would probably be the time to prove your mettle. Those who have the savvy and stamina to build real businesses that they can migrate elsewhere will be in luck. Those who treat the platform as a place to publish the occasional hot take and host video chats with an all-too familiar cast of fellow green-room denizens almost certainly will not. I assume, by this point in your career, you know who you are.

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