• Social startups like Diem and Spill are tapping users as investors.
• Both are using WeFunder, a platform where everyday people can invest in early-stage startups.
• Users who invest in the companies also receive special perks.

Some early adopters of new social-media apps are getting more than just bragging rights.

Two early-stage social startups are opening up investment rounds to include the users of their apps (and other everyday investors). Diem, a social search platform powered by AI, launched its community round in February and is scheduled to close in May. And Spill, a visual conversation app centered on culture, founded by ex-Twitter employees, will launch its own community crowdfund in March.

"We've always wanted the community to be able to own a piece of the product," Diem CEO Emma Bates told Business Insider.

Both platforms are using WeFunder, an equity crowdfunding tool that is compliant with SEC regulations. WeFunder has been used by startups like fintech Mercury and app developer platform Replit to raise millions.

"What we have is a tool that allows you to let a larger number of smaller checks into the deal," said Read Ezell, director of fundraising at WeFunder.

Like angel syndicates, where angel investors pool their own money, community investors on WeFunder are represented by a single lead investor and receive a single line on a startup's cap table (a breakdown of who owns how much of a given company).

Diem's round allows users to invest starting at $100, while Spill is setting its entry point at $250.

Often, crowdfunding rounds listed on WeFunder accompany venture capital investment rounds.

"It's not a signal that you can't raise money," Ezell said. "It's a signal that you have another way to raise money."

For instance, Diem's community round is an allocation of its Seed Plus investment round, which closed with venture capital partners in June. One of those VCs, Charles Hudson (a managing partner at Precursor Ventures), is the lead investor for the WeFunder syndicate of community investors. That means Diem's WeFunder round offers community investors the same terms that Hudson invested on.

Diem and Spill have each raised over $5 million in venture capital, per the companies.

Ezell said crowdfunding can be "intuitive" for some social startups and consumer-facing businesses.

"For us, it just made sense," said Spill CEO Alphonzo Terrell, adding that users were asking to invest when the platform was still nascent. "We're a community-driven product and for a community that frankly doesn't get billed for in social media and also typically doesn't get access to these types of opportunities to be a part of an early-stage tech platform."

Since it launched, Spill has centered Black, Brown, and LGBTQ+ communities on the app. Diem advertises its app as being for "girls, women, and gender-expansive people."

While Spill and Diem are inviting users to invest in the company at an early stage, other larger networks like Reddit have tapped users as investors. When Reddit was preparing to go public in 2024, it offered some power users priority access to buy stock at the IPO price.

What app users get in return

By investing in startups like Diem or Spill via WeFunder, users are entering a simple agreement for future equity (SAFE). In other words, if the startup goes public in the future, the users would be guaranteed stock. If the startup is acquired, community investors also receive returns.

For early-stage startups, seeing those returns could take a while. And there's the risk a startup won't successfully make an exit.

"The reality is that it's risky, but also the reality is that most investments are under $1,000 on WeFunder," Ezell said.

Beyond equity, Diem and Spill are also offering different perks for their community investors — clout being one of them. For instance, Spill will add "investor profile badges" to app users who participate in the round, as well as access to new features, exclusive events, and first-looks at company updates.

Diem is offering similar perks for investors that can be unlocked at different investment tiers. People who invest more than $250 can gain access to Diem events, for example, while people who invest more than $1,000 also receive company merch. (Investment perks are listed on the WeFunder investment terms.)

Investing in the future of social media

The current moment in social media is also fueling these startups' decisions to crowdfund. From Meta's changing policies to TikTok's uncertain future, many social-media users have been seeking alternative platforms.

"A lot of people are interested in supporting the next generation of tools that help us stay informed and connected," Terrell said. "Clearly, there's a desire for something different, something much better, and we think people who are participating in this round are going to be key voices and partners for us in that."

Diem and Spill aren't the first social platforms to use WeFunder, either. In 2023, Substack used WeFunder to raise $7.8 million from more than 6,000 participants. Then, in 2024, Beehiiv, another newsletter platform, raised $1 million from over 800 participants.

"From day one, we have always looked to our users to determine what we needed to build," Beehiiv's CEO Tyler Denk said. "They're a huge part of the success we've experienced, and I wanted to ensure they had an opportunity to share the upside with us as we build this thing."

Other startups, like Fanbase, a social network focused on creator monetization, have used StartEngine, another startup crowdfunding platform.