Reddit has raised $50 million in funding. It’s now planning to offer “shares” in the company to users, though exactly how that will work is uncertain.
The funding round is designed to raise money for a program of measures to better maintain and establish the site including taking on new staff, targeting mobile devices and improving its ability to sell advertising.
Investors in this round of stock include Jared Leto and Snoop Dogg. As a whole the investors bought the equivalent of a 10 percent stake in the company meaning that, on paper at least, Reddit is “worth” half a billion dollars.
As part of the funding, the new set of investors have agreed in principle to give 10 percent of their shares (equivalent to one percent of the entire company) to the site’s users. Chief executive Yishan Wong says of the idea that “We’re going to need to figure out a bunch of details to make it work, but we’re hopeful.”
Given there’s millions of users involved, it doesn’t seem to be as simple as just handing over shares. Wong has also explained that one plan under consideration is to create a Bitcoin-style cryptocurrency, which could be divided into very small units. The cryptocurrency would be backed by the one percent of company stock, meaning that somebody who accumulated enough of the currency could exchange it for a share or shares in Reddit.
Speaking to VentureBeat, Wong rejected claims that the funding round had any influence on the decision to close a section of the site titled “The Fappening” where users posted links to nude photographs of celebrities that had been retrieved without permission from iCloud backups.
Wong reiterated that the closure was not based on the subject material itself, but rather that the site had been hit with takedown requests based on the images violating copyright; he also said excessive spam and malware posts on the section had influenced the decision.