SEOmoz’s Disappearing VC Round: Transparency on Another Level

One of the most well-documented entrepreneurial sagas out there just got even more interesting.

Rand Fishkin, the co-founder and CEO of Seattle search-marketing firm SEOmoz, has updated his extremely transparent journey toward a possible second venture capital round with a disappointing final note: The $24 million deal fell through at the last moment, after a letter of intent was signed by a New York VC firm, for reasons that sound pretty puzzling.

I’ve updated our Storify timeline of this fascinating story to include the newest entries, but you should really go read the whole thing yourself. It’s a great picture of the inside game around raising venture capital, including screenshots of email exchanges (with names blurred out) and soul-searching about whether Fishkin and company got too cocky planning what they’d do with the money before the check was actually signed.

As we discussed previously, this kind of aggressive transparency is a hallmark of SEOmoz’s company culture—look no further than the blog posts from a few years ago when Fishkin discussed his last unsuccessful fundraising attempt. The first time around was different in one key respect: He was out pitching the company to investors. This time, he was fielding incoming offers from the VCs.

Fishkin is obviously committed to continuing this level of transparency—otherwise, he wouldn’t have blogged his failed round so extensively. And, although some folks have asked whether Fishkin would regret being so open now, I don’t get a sense that conventional embarrassment would put him off this path.

Indeed, Fishkin told me earlier that VCs have been aware of his commitment to sharing as many details as possible; the VC on the other end of this almost-deal even consented to having a redacted email published as part of the analysis and released Fishkin from any non-disclosure agreement restraints so he could discuss it all.

In the end, SEOmoz is a profitable company whose revenues have been doubling year over year, with only about $1 million in VC money from 2007. That’s nothing to be unhappy about. In fact, one of the commenters on Fishkin’s post actually congratulated him for helping out other entrepreneurs by opening up the process so thoroughly.

Here’s the updated Storify timeline, which also appears over here.

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