Summary:

Weblog network Blognation’s founder Sam Sethi is relinquishing control to make way for what he says are potential buyers after failing to se…

Weblog network Blognation‘s founder Sam Sethi is relinquishing control to make way for what he says are potential buyers after failing to secure hoped-for funding. Contributors are owed several months’ salaries after promised investment failed to materialise. Tristan Louis, who owns the domain name and was once CTO at Boo.com, is now looking at options to rescue the site under a different arrangement with writers, believing the proposition to be sound; a number of negotiations are understood to be in the pipeline. Sethi told paidContent:UK writers have agreed to convert the money owed in to equity in the publisher, adding: “Three other private investors have stepped forward to buy Blognation; we will see how it goes.”

Slough-based Sethi claimed a late VC funding round of £250,000 was due to be made this Monday but was “scuppered at the 23rd hour” last Friday when TechCrunch published “internal emails and our confidential termsheet” for the deal. “The Blognation termsheet was agreed, due diligence completed and it was due to be signed,” he said. But, in light of the publication, Blognation’s prospective VC offered new terms Sethi found “simply unworkable”, he said: “I chose to step down to help Blognation find a new buyer.” He claimed the emails and termsheet had been leaked to TechCrunch after being “stolen” from his Gmail account.

Outstanding debt is currently less than £30,000, Sethi told paidContent:UK, including payments of £15,000 to developers and to the widow of Marc Orchant, a popular contributor who passed away this week after suffering a heart attack. One blogger published a different set of figures.

Sethi said he lied to team members about the likelihood of an earlier round of funding because prospective investors were being discouraged by a disagreement with a former business partner. “When the funding took longer, I feared one or several editors might leave … I wish I had simply told the editors after we had the initial funding problem, which, two months later, was fully resolved and about to be signed. Ten of the 13 editors, after all the delays and negative feedback … chose to stay involved.”

It’s the sad, public story of an ambitious nanopublishing venture that sought to chronicle web startup culture – and go up against bigger rivals. Operating to the ethos “go big or go home“, Sethi bootstrapped Blognation in July out of the ashes of Vecosys, a blog he formed following an acrimonious fallout with TechCrunch publisher Michael Arrington. Sethi exited as a TechCrunch UK writer 12 months ago after a public online row with the blog mogul during the Le Web conference in Paris. Echoing the spat this year, Blognation’s implosion began when one contributor announced his resignation last week in an open letter complaining about unpaid salaries. The episode once again ignited over blogs before the founder decided to step down. Sethi conceded he is “very disillusioned by the blogosphere”.

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