Blognation May Rise From The Ashes

Is it me, or does Sam Sethi seem like a first-class d*uche bag?

to me not that suprising, there is baggage, and then there is BAGGAGE

Baggage like some public flame wars, while not that professional, all not that big a deal, and lets face it, passionate people (ie the ones who tend to succeed) are also the same people then tend to erupt (there are 2 sides to passion). We’ve all heard the Steve Job eruption stories after all.

Then there is real BAGGAGE, law suits, screwed up cap table, etc.

“The chain of screw ups was just too long. Sethi had an emotional explosion and threatened to kill his cofounder over a legal dispute. He reportedly lied to his editors flat out that he’d raised a £1 million (more here) so that they’d continue to work for free.”

What kind of company could read this and with a sound mind give them 250,000 pounds?
I guess Web2.0 is more powerful than I thought.

I second that Jay.

“Then there is real BAGGAGE, law suits, screwed up cap table, etc.”

That depends. If it’s like SCO, then yeah.

Michael, it is awfully suspicious that there’s no date above. Don’t you think that a term sheet would ordinarily be dated?

How are we to know that this doesn’t precede the recent theatrics and is simply another of Sam’s deceptions? Personally, I hope this is true - after all, Sam owes me more than he owes anyone except Jeremy Baines. However, judging from Sam’s creativity with photoshop from prior “scans” I won’t believe it until my demands are met and Marc Orchant’s wife tells me that she has a cashier’s check that has cleared her bank.

Oliver

Oliver, I have no idea as to the authenticity of the term sheet. As I said above, I’ve emailed Secora for comment.

IF the deal closes? Micael, look at the payment tranches scheduale on bottom fo first page. the very last of the capital was to be paid to Blognation on June 1st 2007.

not 2008.

Either it’s an error or these guys got their funding many months ago, and most likely burned through the cash already. Because of that single discrepancy, I highly doubt this term paper is current

Sometimes genius is misunderestimated. You go Sam! You go!

Also, check clause number 18 on the final page. Mr. Sethi has to come to terms with me if he wants this deal to close. Otherwise there is most certainly litigation to be anticipated as it is absolutely pending less such terms being reached.

updates on Marc Orchant are here: http://owstarr.com/marc-orchan.....formation/

#9 is correct. The dates are from early this year, something is wrong here.

ironic that leweb3 is advertising on his blog?

Blognation is dead in the water, until it gets bought out completely and Sam’s name is nowhere on the company employee list. None of this 25% share etc is going to help it revive it.

Wrong dates (which is an honest mistake, really), that this leaked out before close (during a quiet period no less), that Sam is talking to parties about acquisition and there are currently still legal issues open (including Lee Wilkins’ claim that he owns the actual originating company and idea)… All make this all very, very odd…

I hope this closes (for the bloggers’ sakes), but not sure if I should applaud Secora or what?

Also, any blogger thinking this means “immediate close Monday” (as Sam promised in the last BN thread on TC) need to realize that the doc specifies for legal issues, reps and warrants, due diligence and background checks before the tranche closes. Most folk who’ve raised money know this can take 4 weeks at best or 3 months at worst.

This seems to be from several months back. Read Secora’s annual report where it says:

A strategic review of the business and strategy was undertaken following the closure of “Movin’ Out” and the
departure of several directors. It was concluded that the Company did not have sufficient capital in the short
term to continue backing high-budget live entertainment projects, but had maintained the support of major
shareholders to seek new opportunities to rebuild shareholder value.
The Board has subsequently carried out due diligence on a privately owned media and entertainment business
and portfolio of investments in related sectors, but neither opportunity resulted in a deal. All material costs
relating to these two opportunities were recovered.

…

During the due diligence process it was determined that the financial results of the target business were
significantly below expectations upon which the price had been based. Several attempts were made to renegotiate
the deal on terms that were acceptable to the Board and that could be recommended to
shareholders, but without success. As a result it was concluded that the transaction would not be in the
interests of Secora shareholders and should be aborted. The settlement of professional fees relating to due
diligence has been concluded and a cost provision has been made under administrative expenses for the year.

It seems like this is referring to Blognation, but cannot be sure as the company’s name is not identified.

Also look at Secora’s OWN finances … they can’t really afford to spend 250K on anything!!!

this is from earlier this year. The dates on section 2.3 validate this.

Interesting.

Is 250,000 enough to keep 14 people employed for a year?

What advertising revenues does blognation generate?

I give credit to Mr. CEO for at least joining in on the conversation

I read the dates thing 2 ways. Again, thinking that VC’s do occasionally make year mistakes on term sheets (since they rarely need to change the year).

If it’s right, then 25K (10%, which is totally normal) goes to closing costs, 65K goes to current writers. Since BN’s been up for about 3 months (all the way up), that assumes a monthly writer cost of 15K. If there are no other costs, that gives them about 3 months of runway. So basically April. It’d be tight, but potentially doable.

At that point, their burn goes through the roof, as they look to be needing the 60K from April to last 2 months. Then the 60K from June might last them 2 months, in which case they’re raising money with a close date of next fall. That’s doable.

That’s if the term sheet is recent.

If it’s not, that’s easy to prove to by doing the math backwards. 60K for 2 months is 30K/month. With back pay and closing costs, that only gives BN 1.5 months worth of runway, which wouldn’t make sense if their next tranche closes in April.

Dunno, I’m not sure there’s a solid way to make the call one way or the other. We’ll need to wait for Tuesday (if Sam’s right about getting money to bloggers on the 11th) or later (if he’s being overly hopeful, which is pretty normal for an entrepreneur).

#17, Patrick,

BN doesn’t report revenues anywhere, however traffic is apparently in the

Its a pile of crud, the document is full of spelling mistakes, no way this is a real term sheet. (coincidence how it was released Friday PM? when offices are closed for next 72 hours?)

This guy Sethi continues to dig himself deeper and deeper - once you guys show the term sheet to be a fake - whats his next move going to be? Signed investment commitment from Santa Claus?

Having spent the last couple of hours reading the whole historic Sethi-Arrington-Butcher-LeWeb - TechCrunch - BlogNation - TechCrunchUK-yada-yada saga - there is way to much testosterone flying about - and as the mafioso say - its become too personal.

What happened to the net just being a simple resource to use to help find some good old fashioned porn???

Alright, I’m heading offline to fly to Le Web. See everyone there!

Mike - Why kind of news is that ?

Would you just post anything that comes your way ?
Who’s the source ? at least give some hint on credibility.

Based on this guys history wouldn’t it make sense to wait until you hear back from Secora before posting this?

While I was reading Secora’s doc… Hehehehe… Looks like blognation screw up confidential agreement. The payments made out April and June 2007.

I believe Money is nothing something you play with london stock exchange. I think they should refund all VC money back to Secora.

My best suggestion for Oliver and Sam is flee the country and clear your name, even if you can’t pay back secora’s fee.

Why is Techcrunch closest friend always screw up thing they don’t know?

Edgeio, Blognation, and losing ben. This looks like another ABC desperate housewife drama.

I call this “Desperate men” drama.

Is it just me or is TC’s standards of reporting and quality of stories starting to really slide ?

Arrington wake up - wtf happened? your blog used to be beautiful?

I seriously doubt it!

One point of clarity. That is not a forged document as Debi Jones and Oliver Starr like to tell people. It is a copy of an online expenses payment sent to me as proof via Skitch from Sam. Facts not fiction please.

Wow Michael, this should be your theme song:
http://www.skreemr.com/link.jsp?id=67534655555B
(warning: its Wu-Tang, so lots of explicits..)

Michael - this is getting boring.

You’re turning into a tabloid. Either report as a non-biased news source or it’ll just lose its quality. This is the most biased post I’ve seen in a long time - shoddy journalism and I’ll now read your writing on TC with a pinch of salt.

“currently controls Blognation”

“threatened to kill his cofounder”

“lied to his editors flat out”

“keep Blognation alive for a few more months”

“Putting Sethi aside”

“looking at a bleak holiday season”

“they may be able to put food on the table and buy gifts for their children.”

Stop with the emotion and provide facts. Really enjoying TC .co.uk - Mike Butcher is holding high quality there while .com falls.

How are they paying their interim taxes?
You know those huge multithousand dollar payable bills that go to the govt each month?

The govt should have shut them down by now. Is there an IRS in the UK?

Let’s see what lies ahead. We’re with you Sam!

There are an unusual amount of typos and spelling errors in this document. Most of this should be boilerplate.

For instance, look at section 5.2.5:
“Investment Preference: AGAIN MAKE REASING NEW MONEY HARD”

Come on guys, just hit F7.

Ewan, your idea of facts mystifies me. Just last night you said the following to Oliver via Skype.

[deleted per Debi Jones' request. See my comment below for clarification]

http://updates.blognation.com/.....orry-team/

Wow, it seems just about everyone from within BN are publishing private convos to stab each other in the back. Regardless of Sethis fraud, if it’s reached the stage where internal communications can’t be trusted, the company is already dead.

I don’t see how anything can save it now. Have you guys never heard of an NDA?

Ok. So the Ewan Spence comment above (no. 29) was not written by Ewan apparently. The comment led to Debi Jones replying with a private Skype conversation, which she has asked that we now remove (and I am).

But this is just turning crazy. Here’s Debi’s email to us:

I would very much appreciate the removal of my comment to who I thought was Ewan, but Sam Sethi has admitted that he posted using Ewan’s name. I have the ability to remove my comments from mobilejones.com which I have done. That Skype chat should not be public and would not be had I known the comment was not authentic.

Thanks for your help,
…Debi Jones

I’m going to bed.

Is someone selling the film rights for this story? I’m thinking ‘Catch me if you can’ meets ‘Hackers’ with a little ‘French connection’ in it. Guaranteed straight-to-DVD best-seller!

Its a shame blognation has gone the way it has. I really had High hopes for it when it launched.

I enjoyed its in the vecosys format and still visit blognation a couple of times a day . Blognation for me is far better than techcrunch in terms of covering new startups and bringing fresh news rather than ( google , facbook, payperpost crap )

Lots of ass covering going on here now it appears this may just go legal. I see the named investors are a listed company who could find their stock price damaged as a result of what has happened. If this happens do they have good grounds to seek damages from who ever leaked the document and from TC who published it?

Any lawyers out there wish to comment.

I think many people who stmble upon this piling junkyard of everyday posts regarding BN, SS, MA et all with all juicy details… will just think that ‘bloggers are a bunch of quarelling retartds’…

Objectively speaking, this ongoing campaign looks exactly like that, like a quarell of retards.

I’m not sure this is interesting to the general public… Like, AT ALL.

So who added all the comments in capitals? I know things look desperate for blognation but signing anything along these lines will certainly mean they never raise another round of funding.

From Blognation’s old about us page which you can find by typing into Google - Blognation about us - and clicking on cache:

‘What is the business model behind blognation?
blognation is backed by undisclosed venture capital funding, by vendor advertising and through affiliate advertising.’

Oliver, What was your motivation in writing this “open letter”? What did you think it would achieve?

You obviously believe you were greatly wronged and as the facts stack up, you do appear to have a valid case. Your “first and most critical demand …. a cashier’s check …. to my friend, Marc Orchant and his family”.
Yet you seem to be doing all in your power to sabotage BN raising the required funds to cover this. You seem hell bent on preventing your own demands ever being met. I find this very strange.

Whoa…this is going to get kinda dirty. Man…you Tech people are worse than Anime fans.

Is there any way to put Sam Sethi (or Scam Sethi as I hear they are now calling him) into the Dead Pool?

I can’t see how he’s ever going to work or get funding.. or even just taken seriously in this industry again.

Sam, if you’re reading, have you thought about opening a bar in Thailand or something? I just don’t know who would touch you with a barge pole…

sam needs to chill out or he’s going to give himself a stroke. and stop playing on other people’s accounts.

Wow, Mike A, the most amazing thing to me is that you think you’re reporting or refereeing this story while not even realizing that in the minds of any person who is curious enough to pull up the old articles and posts on this entire thing you’re smack in the middle of it - and you don’t look all that much better than Sethi, Starr or whomever, to be honest, only more self-righteous than all of them combined. People, follow links in the posts and Google this dispute, it makes for interesting reading. Starting from Arrington’s less-than-convincing case for Sethi’s firing from Techcrunch, to the last post in which Arrington attempts to engineer Sethi’s supposedly threatening to kill someone (”rip your head off”… if I were threatening to kill someone every time I say something like that, I must be Kim Jong-Il or something like that), to this now - leave your personal feud and emotions out of this one, Mike, and let other people report on it. If Sethi’s really a bad dude, he’ll blow up all by himself. If not, well, then you’ve just contributed immensely to another start-up imploding. Redirect your wrath back on Facebook.

I think all this is newsworthy and TC is quite right to lay it all out in the open.

Hey come on, this is some of the best entertainment I’ve seen on the internets this year. Anyone got a link to a photo of Sam Sethi, I’m a little curious to know what he looks like.

superdude here you go:

http://www.646bc.co.uk/assets/.....-Mitty.gif

Mr. Arrington,

We would like to speak to you about the Blognation situation, I can be reached at the email on this comment.

Thank you for your time,
Sean P. Aune
TECH.BLORGE.com

Blognation is reporting that Sam sethi is stepping back and Blognation is to be auctioned. http://towerone.com/2007/12/14.....lognation/

Wow, Techcrunch published a confidential term sheet …

I wonder why the funding didn’t close, eh?

Question to Techcrunch: How does publishing a confidential term sheet serve Techcrunch readers? So much for your journalistic ethics. How pathetic! You deserved to be sued … and loose!

Arrington, you are a miserable fuckhead. Can’t wait for Karma 2.0 …