Joel Spolsky has just posted Raising money for Stack Overflow where he talks about seeking venture capital for Stack Overflow.

If instead they opted to seek shareholders from the StackOverflow community along the lines of the Alliance for Code Excellence, but at a larger scale, would you be interested?

I'm asking this because I suspect there might be enough fanatics willing to invest $500 or so in a product they love to raise a considerable sum. People also often talk about the motivation for high rep users. It seems to me having an actual stake in the product might be a decent incentive (especially if you also get a gold badge for buying shares).


10 Answers 10


Selling shares in a company to the general public is not legal in the US without going public, i.e., an IPO. The shares have to be registered and listed on a public stock exchange, like NASDAQ or NYSE.

Ben & Jerry's managed to find a law, I think in New Hampshire IIRC, that allow them to register in New Hampshire and sell shares to residents of that state. This is quite unusual.

  • 4
    ...so you're moving to New Hampshire and inviting the wealthiest users to follow suite? :)
    – Sampson
    Feb 15, 2010 at 22:35
  • Off to the UK it is then! (I have no idea on the legality of the system here).
    – Damien
    Feb 15, 2010 at 22:41
  • 1
    I don't mean shares in the stock exchange sense. A VC will invest in exchange for some stake in the company. Is there not a means to allow for hundreds/thousands of individuals to do the same on a smaller scale? Feb 15, 2010 at 22:46
  • @home4film - having an equity stake in a company is the same thing as owning shares in a company. The company doesn't have to be publicly traded, though, it can still be a private corporation.
    – user27414
    Feb 16, 2010 at 2:54
  • 2
    VCs are special. They are legally defined as "Qualified Investors" so they are allowed to invest in non-public companies. Feb 16, 2010 at 3:21
  • @Joel, what about Angel investors and Angel investment funds. Do you have to become a "Qualified Investor" to be one of those too? Feb 16, 2010 at 9:57
  • @Joel: Vermont. And it was indeed quite unusual. Feb 16, 2010 at 14:10
  • @home - Angels generally are in the "qualified" bracket as well. As an investment target, you don't want to take on investors who are not "qualified". It is a bad idea.
    – tim
    Feb 16, 2010 at 15:06
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    One way to allow users to invest would be by forming a coop, which can generally have each person invest a fixed amount and be paid based on their usage of the service as opposed to what percentage they own (how a coop food store generally operates). But, I'm not sure that Joel and Jeff feel like running a democratic coop here. Feb 16, 2010 at 16:34
  • @Joel, why do you say qualified instead of accredited? ($5M instead of $1M)
    – tim
    Feb 16, 2010 at 17:54
  • 1
    So for $1M we can buy an "accredited" badge? The color would be gold and green. For $5M we can buy a "qualified" badge.
    – tim
    Feb 16, 2010 at 18:46

I couldn't answer that without seeing a prospectus. How does SO make money? Is it profitable? Does it have a plan for growth? You need more than just a neat idea for a business to work.

I'm not saying that Jeff and Joel don't have all of this worked out - just that it's not public information. As outsiders, we have no facts on which to build a decision.


Please, no badges for $

  • 1
    +1 I cringe at the thought :) Although I don't necessarily oppose the idea of investing in Stack Overflow (Stack Exchange?).
    – Sampson
    Feb 15, 2010 at 22:20
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    I tend to agree, but if the choice is between badges for community shareholders and "evil VC" changes (meta.stackexchange.com/questions/39545), I'd take the badge Feb 15, 2010 at 22:26

As of 2016, my answer has changed: Yes, I would buy shares in either.

Also, I gave a terrible answer before. I'm surprised it got upvotes.

In Stack Exchange? Yes.

In Stack Overflow? No.

Besides Ad Revenue or (Oh God, spare me) paid membership, there isn't a business model there; at least not one that would justify a ROI.

Again, this is with no data on how much their ads bring in whatsoever. They may bring in a healthy chunk of change.

Note: Stack Exchange is the whitebox version of Stack Overflow. It's the version they sell to customers. It is funded by FogCreek LLC, not Stack Overflow LLC. FogCreek LLC currently pays a royalty to Stack Overflow for the use of its codebase.

Stack Overflow as a company is distinct from Fog Creek Software as a company -- this was talked about in podcast #4.


After reading Joel's answer to a question about negative effects of VC, he brings up something I'd forgotten about: Stack Overflow Careers. I believe Stack Overflow careers is a viable business model and I'd definitely buy shares of a company that held that product.

  • 7
    Oh, and if I became a partner, I'd totally make Jeff and team institute my feature requests, cause, you know, I could. (I keed!) Feb 15, 2010 at 21:08
  • Stack Exchange/Overflow is same company isn't it?
    – Damien
    Feb 15, 2010 at 21:12
  • Has Stacks Exchange been successful? I'm not seeing SO break out of its little niche. Feb 15, 2010 at 21:57
  • I think Stack Exchange is great, but it doesn't seem like it's really caught on outside of StackOverflow
    – Earlz
    Feb 15, 2010 at 22:03
  • Stack Exchange is the whitebox version of Stack Overflow. It's the version they sell to customers. It is funded by FogCreek LLC, not Stack Overflow LLC. If they want VC for Stack Overflow LLC, then that's different than wanting it for FogCreek's Stack Exchange product unless they plan on selling/giving the improvements to Stack Exchange back to Stack Overflow. Feb 15, 2010 at 22:53
  • Joel explains the connection between SO and SE, and which he is requesting funding for here: meta.stackexchange.com/questions/4352/… In short, he is requesting funding for Stackoverflow which owns careers. He is not requesting funding for stackexchange, and the connection is that fogcreek licenses stackoverflow engine from stackoverflow the company.
    – Pollyanna
    Feb 15, 2010 at 23:46
  • Another means of making money seems to be the StackOverflow conferences, assuming they continue. They seem to have been pretty well attended (the one I went to (in Northern VA) was almost Standing Room Only).
    – GreenMatt
    Feb 16, 2010 at 17:38
  • @greenmatt I was at the one in Falls Church as well. I wrote up a review about it here: meta.stackexchange.com/questions/27367/… Feb 16, 2010 at 18:41
  • @george stocker: I was there too. My review, which refers to yours a couple times, is at: meta.stackexchange.com/questions/27367/…
    – GreenMatt
    Feb 16, 2010 at 19:04

Yes. I really like Stack Overflow and would be willing to do something along the lines you suggested. A collection of programmers, server admins, super users and ponies could invest in the site and take a proportion in shares. It would be a nice way of those who were there at the start or quite early on to maintain a sense of ownership and community as the site gets bigger.

I don't think it should get badges as this obviously undermines the integrity of the site, I also wonder if this would raise anything like the sums Joel considered necessary to further the site. Still, Even if it's not the sole method of finance, it would be nice for the community to own a part of Stack Overflow.

  • 3
    super users, ponies AND Unicorns!
    – Pekka
    Feb 15, 2010 at 22:04
  • @Pekka Well the Unicorns go without saying...
    – Damien
    Feb 15, 2010 at 22:30
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    *shoots the unicorns* how 'bout just super users and ponies? Feb 15, 2010 at 23:03
  • 4
    ::taps @~quack on shoulder, flashed mythical game warden badge:: Sir, unicorn seasons has been over for two month, sir. I'm afraid you'll have to come with me. Sir. If you'll just hand over your gun and ... Don't you reach for that Horn, Mister! Feb 16, 2010 at 2:21
  • 1
    @dmckee I'm totally for introducing the mythical game warden badge. That said, I totally resent the notion of a unicorn season. There is no season for Unicorns. But there is one for ducks. (Looking at @quack)
    – Pekka
    Feb 16, 2010 at 16:09
  • "There is no season for Unicorns." @Pekka, that depends where you're from. I mean, in Texas they have one on campaign contributors. Feb 17, 2010 at 0:36
  • @dmckee sounds like fun!
    – Pekka
    Feb 17, 2010 at 1:39
  • @Pekka: i think you have me mistaken for a bird of another feather. i'm not quack. sez so right here: Feb 17, 2010 at 6:07
  • Hah. What I see is an approximation of a quack! Which is exactly how a duck would disguise itself during duck season.
    – Pekka
    Feb 17, 2010 at 8:09
  • 1
    As they say... When it looks like a duck, walks like a duck, @~quacks like a duck...
    – Pekka
    Feb 17, 2010 at 11:12
  • @Pekka: no Symbolic Logic course, huh? are you a programmer? maybe you're more familiar with the spelling "!quack"? same thing. Feb 17, 2010 at 11:13
  • @Quack true, I lack some CS basics! I think in the german-speaking world ~ is also used for "approx.", I didn't know it's equivalent to !. Well, anyway: If it looks like a duck, walks like a duck, and insists it's not a duck, and it happens to be hunting season, it still probably is one. :)
    – Pekka
    Feb 17, 2010 at 11:51
  • btw, do you get notified when addressed with @quack?
    – Pekka
    Feb 17, 2010 at 11:53
  • @Pekka - yes, "approx" is another interpretation of "~"; as is "user" in the Unix world ("~" == "$HOME"); i use the SymLog interp: meta.stackoverflow.com/questions/25542 ... and no, i don't get any @ notifications at all. (whether you use @quack or @~quack -- notifications operate on Display Names, and i don't have one.) ... and now we are completely and utterly offtopic... :) Feb 17, 2010 at 22:54

Given that we programmers (many of whom are entrepreneurs) are currently the customers and likely biggest competitors (ie, willing to use open source SO projects to avoid SE charge) of stackexchange, then I would be very surprised if he made the prospectus public enough to make a decision.

There are many programmers who might make use of such information to start their own competing service.

In a sense, Jeff and Joel's greatest threat is their current asset.

But it could merely mean he's acting on his own belief hinted at in a very early podcast that they needed to branch out and have language specific version of SO (and by extension SE) so that the SO of China, for instance, doesn't eat their lunch in one of the biggest upcoming economies.

As has been amply demonstrated, SO the model can be duplicated in a month's time. If they don't capture the market, then while they may have been the originators of it, they won't be the person who benefited from it.

  • 1
    +1 for mentioning branching out language specific versions. There are HUGE markets of programmers out there that WON'T participate in SO as long as english is its only language. Of course they all understand english - otherwise they couldn't survive in this line of business. They just don't speak it well enough (or think they don't) to participate in conversations with fellow programmers, most of whom are native speakers. There would be huge potential in a well-managed SO Germany, SO Francais, SO Espanol, SO Russian...
    – Pekka
    Feb 15, 2010 at 22:13
  • A lot of people talk about how easy it is to copy SO's Q&A format. Where are all the copycats? So far one Chinese and one Russian and I don't know about their quality. It's been almost two years now since SO came out. If people really think Q&A sites are awesome, I would expect developers would be working on open/closed source alternatives. Feb 17, 2010 at 5:27

I don't get it -

Now we’re biting off the bigger goal of changing the way everyone gets answers to their questions on the Internet

Surely this is what StackExchange is about, not StackOverflow?

  • As others have said Joel appears to treat Stack Overflow and Stack Exchange as synonyms.
    – ChrisF Mod
    Feb 16, 2010 at 8:33


Now we’re biting off the bigger goal of changing the way everyone gets answers to their questions on the Internet

This I totally get, but so far as I can tell, there's no proprietary IP here. Not for asking questions on SO or SE sites, and not for careers. It's far too easy to duplicate the model, and would be far too difficult to enforce infringement of a copyright or patent (if one can even be obtained).

The only option to make the business model proprietary-like is to be the only show in town. Given the infinite continuum of topics in the universe, to have a monopoly on the business model, you have to have a monopoly on the topic space, which is impossible if you aren't big enough. Even so, there will always be gaps in topic space coverage because the topic space itself is changing and expanding (which, I assume, is actually part of the goal of the business). Are there topics which won't be covered because of an ethical or moral issue? Given the business model, these gaps are bad. The direct coupling of revenue and time isn't so hot either, but it's not a deal-breaker.

From reading the blog entry, it sounds like this is the type of strategy Joel is thinking about. It's high risk that needs to be justified by a potential high reward. So, from the point of view of an investor, what are the next logical questions to ask about the reward model?

  • How scalable is it in the current markets?
  • How scalable is it in the target markets?
  • How sustainable is it in the current markets?
  • How sustainable is it in the target markets?
  • Who are our current competition, and how can we offer better value?
  • Who are our future competition?
  • What is the exit strategy?

When I start answering these questions based on the current models (ads, careers, and StackExchange), one certainly makes more sense than the others, but none of them seem particularly appealing.

Ads: People generally dislike ads, no matter how benign they are on the page. Ad-blockers are becoming more and more popular, and even without them, people won't keep clicking on ads. This revenue stream will eventually be neutralized completely.

Careers: The concept of providing a focused listing to a targeted audience is appealing and valuable, but if the major job sites get their act together and provide this service through their already-established channels and users, there will have to be competition on some other aspect, most likely price. More fingers in the same pie, particularly when it comes to price, is a huge negative. Furthermore, the market is already saturated with job sites.

StackExchange: This is the most sustainable revenue model of the three. However, there is already competition in this space. Most importantly, their product is FREE. They've already commoditized the product. The competition must take place on other facets.

IMO, the model needs a lot of work before VC or public investment should even be considered. It's too early.


Joel didn't explain what he needs the extra money for. In his example of Starbucks, opening a lot of new stores quickly is capital intensive. In the case of Q&A sites, doesn't StackExchange take care of this? Maybe they need to raise money to buy a lot of hardware to support a rapid growth. The hosting fee should be self sustaining specially when it starts at $120/month with no free hosting. Any web hosting company would LOVE to have these kind of fees instead of the commoditized $5/month.

Joel should expand on his vision some more before talking about the need for more money.


Yes, provided I don’t need to invest more than a few $100, and I don’t need to pay US legal freeze to do so, or have problems with UK tax.

(I could also consider the dividend in the form of being able to place free adverts, rather then cash)

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