In classic Reddit style, the popular link-sharing site announced Tuesday not only that it's raised $50 million in Series B funding, but also that it plans to give back 10 percent of the equity to the community itself.
Reddit, the so-called front page of the Internet, used its blog to confirm the funding round, which was widely reported earlier this month. As expected, prominent venture capital firms Andreessen Horowitz and Sequoia Capital took part in the round.
But it was spearheaded by Sam Altman, president of Y Combinator -- the incubator that originally helped launch Reddit. Other investors include Peter Thiel, Ron Conway, Paul Buchheit, Jared Leto, Jessica Livingston, Kevin and Julia Hartz, Mariam Naficy, Josh Kushner, Calvin Broadus Jr. -- also known as Snoop Dogg -- and Reddit CEO Yishan Wong.
And now it seems Redditers themselves will be able to consider themselves invested in the site. Wong explained in the blog that while the details still need to be hammered out, "Led by Sam, the investors in this round have proposed to give 10 percent of their shares back to the community, in recognition of the central role the community plays in Reddit's ongoing success."
How that will look is still a bit of a mystery: "We're going to need to figure out a bunch of details to make it work, but we're hopeful," Wong said, adding that Reddit leaders have long been trying to come up with a way for the community to own some of the site.
In a comment thread to the blog, Wong further explained that Reddit is thinking about "creating a cryptocurrency and making it exchangeable (backed) by those shares of Reddit, and then distributing the currency to the community. The investors have explicitly agreed to this in their investment terms."
He emphasized that the plan is in its earliest stages and could totally fail, "but we are going to try it because...well, because we are Reddit and we do these kinds of things."
Wong also noted in the blog that the funding doesn't mean that Reddit is "rich or successful." Just that it won't have to operate on what's been a "shoestring budget." It plans to use the money to add to its current roster of 60-plus with more staff for product development. Other plans for the money include expanding the community-management team, building out moderation and community tools and working more closely with third-party developers to expand mobile offerings.
No word from Wong on what the investment means for Reddit's bottom line. It's long operated in the red, although that may have changed with the launch in July of its advertising business.
Founded in 2005, Reddit attracts about 133 million people to its site each month. People post stories, images, gifs and other content, and the community votes them up and down. If a link gains prominence on Reddit, a massive amount of referral traffic can follow.
Reddit was once a smaller alternative to Digg, which was at one time the top social news site. A large rebellion among Digg users about four years ago led many to leave for Reddit. Digg lives on as a news aggregator.