No VC Strategy: Community-Funded Growth

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📚 Academic Version

Community-Funded Platform Cooperativism: A Non-Extractive Growth Model

Liana Banyan Platform employs a no-venture-capital (No-VC) funding strategy aligned with platform cooperativism principles documented by Scholz (2016) and exemplified by organizations such as Stocksy United.

Theoretical Framework

The platform utilizes three primary funding mechanisms that avoid the extractive dynamics inherent in venture-backed platforms:

  1. Member-funded capitalization through medallion purchases ($5-$100)
  2. Herald subscription revenue ($5-35/month) for viral marketing contribution
  3. Transaction-based revenue at Cost+20% margins (83.3% creator retention)

This approach contrasts sharply with venture-backed platforms that typically require 10x+ returns on investment, a requirement that Doctorow (2023) argues leads to “enshittification” — a process where platform value is systematically extracted from users and creators to satisfy investor return expectations.

Empirical Validation: Stocksy United

Stocksy United, a photographer-owned stock photo cooperative founded in 2013, provides empirical evidence for the viability of this model at significant scale:

MetricValueYearSource
Annual Sales$10.7M2016Scholz (2016)
Member Dividends$300K2016NetworkCultures.org
Creator Revenue Share50-75%2024stocksy.com
Membership Cap~1,0002024Quality control measure
Traditional Platform Share15-30%2024Industry standard

The membership cap represents a deliberate strategic choice: limiting scale to maintain quality and member value, rather than pursuing growth for growth’s sake.

Implications for Platform Design

The No-VC constraint fundamentally shapes platform architecture through what we term “DNA Lock” — hardcoded economic parameters that cannot be modified by leadership, board vote, or user referendum:

  • Cost+20% margin (immutable)
  • 83.3% creator retention (immutable)
  • No conversion of Ghost Credits to cash (immutable)

These constraints eliminate the governance attack vectors that typically enable enshittification in venture-backed platforms.

References

🎓 College Freshman Version

Why We Don’t Take VC Money (And Who Else Does This)

You know how Facebook started as a cool thing for college students, then got investors, and now it’s full of ads and sells your data? That’s what happens when a platform takes venture capital — they need to make 10x returns, so they start squeezing users and creators.

We don’t do that. Instead:

How We’re Funded

  1. Members fund us by buying medallions ($5-$100)
  2. Heralds pay to promote ($5-35/month subscription)
  3. We take only 16.7% of each transaction (you keep 83.3%)

No investors demanding 10x returns. No pressure to sell your data. No incentive to make the platform worse to squeeze more money out.

Real Example: Stocksy United

Stocksy is a stock photo company owned by its photographers. Instead of taking VC money, photographers bought in as members.

Result:

  • $10.7 million in sales (2016)
  • $300,000 paid out as dividends TO PHOTOGRAPHERS
  • Photographers keep 50-75% (vs. 15-30% on sites like Shutterstock)

They’ve been profitable since 2014. No investors to satisfy. No pressure to sell your data or make the platform worse.

Why This Matters for You

When a platform takes VC money, they’re not really working for you anymore — they’re working for their investors. Everything becomes about growth and “engagement” (which usually means making things more addictive and annoying).

Our approach means:

  • We can’t be pressured to change the economics
  • We can’t be forced to add ads or sell data
  • The rules are literally hardcoded — leadership can’t change them even if they wanted to

Learn More

🎒 6th Grader Version

Why We Don’t Take Money From Big Investors

Imagine you and your friends start a lemonade stand. You all chip in for supplies and share the profits.

Now imagine a rich guy comes along and says “I’ll give you $1,000 for your stand, but I want $10,000 back.”

To pay him back, you’d have to:

  • Raise prices (people stop buying)
  • Pay your friends less (they quit)
  • Add gross stuff to the lemonade (customers hate it)

That’s what happens to apps and websites when they take investor money. They get worse over time because they’re trying to pay back investors instead of making users happy.

Our Way

  • We don’t take that money
  • Members chip in small amounts ($5-$100)
  • We share fairly (you keep most of what you earn)

A Real Example

There’s a company called Stocksy where photographers sell their photos. Instead of having investors, the photographers OWN it together.

They made $10 million selling photos, and the photographers got to KEEP most of it — not some investor who never took a picture in their life.

That’s been working for them since 2013. No investors. Just photographers helping each other.

Why It Matters

Have you ever noticed how free games get more annoying over time? More ads, more “pay to win,” more nagging you to buy stuff?

That happens because the people who made the game took investor money, and now they have to find ways to squeeze more money out of you.

We can’t do that. Our rules are locked in. Nobody — not even the boss — can change them.

Try This

Next time you use a free app and see an ad, ask yourself: “Who paid for this app to be made? What do THEY get out of it?”

Additional Resources

For Educators (Didasko Integration)

This page demonstrates the three-tier reading level approach used throughout Liana Banyan’s educational materials. Key learning objectives:

  1. Economic Literacy: Understanding how funding models affect platform behavior
  2. Critical Thinking: Analyzing incentive structures
  3. Cooperative Economics: Alternative ownership models

“We’d rather have a platform that works for members than one that works for investors.”