Rumors are rumors and Techcrunch has been known to push them forward without base or backing. With that said, the latest Reddit rumor that they are raising money would make sense.
But we’re hearing now from a source that, a little over a year later, Reddit is raising money. And the company’s valuation has jumped to $400 million.
If it’s true, this could mark the beginning of the end for the “front page of the internet”. The site is the most powerful private site in the world that really doesn’t make any money (and don’t point to Wikipedia as that would be ignorant to think they’re not making money). The fact that they are scrappy, user-driven, and beholden to nobody has made the site what it is today. All of that would change if that kind of money and the meddling hands of investors come into play.
It’s simply not possible to maintain the trajectory of the site when private investors get involved. Conde Nast learned the hard way that they couldn’t control a user-driven site like Reddit. They’ve made mistakes but have been able to maintain a hands-off approach to their powerful social property. Private investors will not be able to avoid such mistakes. It doesn’t matter how many assurances are given about being “hands off” – infusions of money at that level are bound to change the site and its direction sooner rather than later. Human nature makes it unavoidable if the investment is done with the goal of recouping and increasing upon the capital.
Reddit, as a community, does not like anyone (other than Imgur) making money from their work. They spend time finding, creating, and sharing content. They generate thoughtful, controversial, and humorous dialogue in the comments. They attract stars, worship geeks, and destroy those perceived as villains. These, the things that make Reddit great, do not jibe in a corporate world where the end goal is profit. It’s simply not possible.
Rumors are rumors. If this one is true, the only hope is that the investors found are going in with their eyes wide open knowing that profit might happen but only if they don’t try to make it happen. The brilliant community makes the site great. Anything designed to manipulate or take away their power will end badly for everyone involved.