Why Substack offers creators money to transfer their audience to its platform

That’s where its Creator Accelerator Fund comes in. It launched in January and was announced as “$20 million in guarantees” to help creators move their paid subscription audience to Substack.

“The key word is guarantees,” McKenzie said. 

Unlike the first iterations of creator funds that were essentially pots of cash reserved to reward creators when their content performed well, Substack’s works more like insurance. It’s not just paying creators to move their paid subscription businesses from another platform to Substack. Instead, it’s guaranteeing earnings creators usually make on their current platform, which means they won’t lose any money by making the switch. Though its unclear if or how a creator must prove their earnings before joining the program.

As McKenzie explained: “It’s not a grant or advance, or anything like that. It’s a commitment we’ve made up front that we’ll do at least $20 million worth of these migrations.”

So far, Substack has announced its first cohort of creators onto the program: podcasters Sean Ross and Evan Ross Katz, YouTuber Nathaniel Drew, American illustrator Lisa Hanawalt and Sennett Devermont (otherwise known as Mr. Checkpoint) — all of whom have moved their Patreon followings over to Substack. Though it is not known how much of the $20 million they’ve each been allocated.

Creators aren’t guaranteed cash by getting accepted into Substack’s Creator Accelerator Fund. It’s more like a backstop. Imagine a creator has moved over to Substack, and they’re earning more than the $50,000 they previously made over on Patreon. Substack won’t pay out because they’ve grown their business, not lost any.

“It doesn’t matter how devoted and intensely committed your audience is, there’s always going to be one or two people who drop off because they lost their credit card or just didn’t get around to it, or forgot they even had the subscription,” he explained. “So the guarantee, this fund, removes that anxiety for creators and removes that insecurity.”

And then there’s Substack’s TikTok liberation prize, also announced back in January ahead of TikTok’s Jan. 19 U.S. ban deadline. The prize was a $25,000 lump sum for one creator who created a video that would successfully encourage others to join Substack. 

McKenzie explained that the TikTok deadline was a golden opportunity for the team to get their message directly to creators, publishers, writers and independent voices who are not only trying to build out their own communities, but also a little bit of economic power. As he put it, that’s what’s been missing from the media system since the internet came along. 

“Everyone can have a voice, but not everyone gets economic power,” he said. “We used that [TikTok ban] to say it’s vital that as a creator, you own a direct relationship with your audience. TikTok doesn’t give you that. No one really gives you that. The only way you guarantee that power is by having an audience that lives on a mailing list that you can take with you at any time and no one can mess with, and that includes Substack.”

On Jan. 19, Substack announced independent journalist Aaron Parnas was the $25,000 liberation prize winner, which includes working with Substack for a 12-month period as a creative advisor, in a bid to make the platform a better home for creators.

“He’s still really popular on TikTok but now he has this home [on Substack] on the internet where he will show up and make money from direct subscriptions,” McKenzie said. “Now it doesn’t matter to him if TikTok goes away anymore, because his livelihood is secured.”

TikTok’s U.S. uncertainty simply provided Substack with a prime opportunity to pitch itself as a home for creators where they have control. But there’s still all the other centralized platforms: Facebook, Instagram, YouTube, Pinterest, Reddit and even X.

Thinking about whether they might consider a similar move to entice creators from these other platforms over to Substack, McKenzie said the team “don’t have immediate plans,” but it “makes sense as something we might do in the future.”