Stop Dicking Around and Close: Lessons from the $24M Fundraising #Fail

“You can’t play the man’s game? You can’t close them? Then tell your wife your troubles. ‘Cause only one thing counts in this world: Get them to sign on the line which is dotted.”
-Alec Baldwin, Glengarry Glenn Ross

Warning: Rant ahead. Highly caffeinated.

While everyone else in internet land is saying “oh poor Moz, look how he got screwed” I think the real lesson here is: When you have a deal, close it as fast you fucking can. Seems like he dicked around for a long time, courting investors, being coy, etc. And then the economy tanked and his deal collapsed.

Look, investors are a fickle bunch. This bullshit about “oh they wouldn’t have been good partners anyway because they’re squeamish…” is just that.

If you need the money and want the money, get the money. Do whatever it takes. You are responsible for closing the deal. If being Mr. Nice Guy helps, then that’s awesome. If you need to be a dick and play people off each other, then do that. But time is the enemy of all deals.

I’ve had a financing fall apart myself. It sucked. But ultimately it was my fault and my responsibility. This is the second time the Moz has had this happen. That is not a good sign. Take heed. Do not follow his lead.

Remember, you can hate the game, but it’s one we’ve all volunteered to play.

This post refers to Misadventures in VC Funding: The $24 Million Moz Almost Raised.If you so desire, you can vote this up on Hacker News. Alright internet, flame on!

UPDATE: I posted a follow up.

30. August 2011 by Matt Mireles
Categories: Uncategorized | Tags: , , , | 11 comments

  • http://profitably.com Graham Siener

    Wow, never thought about it like that.  Thanks for that view.

  • http://www.facebook.com/hongquan Hong Quan

    Dang, I haven’t even had time to read the whole Moz blog but thanks for the summary. Seal the deal. That’s the only job of a Founder.

  • guest

    Congratulations on taking one of the most thoughtful blog posts I’ve ever read and boiling it down to a singular and idiotic conclusion. Obviously SEOMoz wouldn’t have achieved their success if they didn’t understand the value of closing a deal. What makes the company and its leaders stand apart is their ability to rise above the snake pit that is caricatured in the clip above. 

  • http://twitter.com/joshuamking Josh King

    I had the exact same reaction when reading Rand Fishkin’s lengthy post.  There was no indication that he ever negotiated the “clock” for closing or recognized the value of a crisp process.  Shit can happen, and you MUST remove the uncertainty of closing.

    Of course, when you do discipline the process and move quickly, you get to write a much shorter blog post: http://corporatetool.blogspot.com/2010/03/avvo-series-c.html

  • Pingback: Shit Happening is Predictable, So Stop Dicking Around and Close (Part II) | The Metamorphosis Shit Happening is Predictable, So Stop Dicking Around and Close (Part II) | Becoming an Entrepreneur, by Matt Mireles

  • Avon

    I totally agree with you. One of the jobs of a CEO is to secure capital; Rand has failed at this twice. While he has done a great job on other things, he has nobody to blame but himself. BTW – maybe the VCs backed out because they were uncomfortable with Rand or a board member violating the NDA on the term sheet. I mean, someone had to blab in order for VentureBeat to get that much info.

    • http://www.metamorphblog.com Matt Mireles

      Ehh, I wouldn’t go that far. His company is still a success and making lots of money. Despite fucking up fundraising, the company is doing awesome.

  • http://www.randfishkin.com/blog Rand Fishkin

    Thanks for the post Matt – I’ve certainly had to face up to the fact that while we did get a great deal and a signed term sheet this time around (and several other term sheet offers), the withdrawal of the investors was on fun and certainly comes down to me.

    I should have done more to figure out that they might not commit even after the signing, and I probably could have done something in the lead up or after the close to make this work. Unfortunately, I don’t know what those things are, but since entrepreneurs get these deals done every day, it’s clearly on my shoulders. Hope I can learn to do this better in the future.

    • http://www.metamorphblog.com Matt Mireles

      Hi Rand,

      Hey man, ’twas a shitty situation and the VCs (Index?) behaved shittily. But truth be told, you run an awesome company that makes some serious ca$h money––so in the end, you and the Moz are fine. Or so your stated numbers seem to indicate.
      However, for the rest of us who, umm, run businesses that lack the Moz’s enviable cash flows and profit margins, I think the lesson is: It ain’t over ’till the cash hits the bank.
      All that said, my guess is that you would? might? have acted differently if the fundraise was an existential, life or death matter, versus an elective, selective affair.

      • http://www.randfishkin.com/blog Rand Fishkin

        Yeah – we’ve been ramping up expenses this year a bit ahead of budget, but we’re not in a terrible spot. We’ll have a less profitable (net) year than we hoped, but still great growth and 8 figures of revenue :-) First world problems, eh?

        Personally, I would never use that nuclear option, nor would I ever threaten it. Our core values and our moral compass are most important to stick to when times are tough. If we can be 100% TAGFEE when it’s most tempting to not, then we’ve done our job.

        • http://www.metamorphblog.com Matt Mireles

          First world problems indeed ;)