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Originally published May 1, 2012 at 4:02 AM | Page modified May 1, 2012 at 6:25 AM

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$18 million shot of capital makes startup SEOmoz feel good

The deal, made in March and being announced Tuesday, gives SEOmoz $18 million that will help grow the Seattle company from 60 employees to about 100 within the next 18 months.

Seattle Times senior technology reporter

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Having been burned by venture capitalists before, Rand Fishkin wasn't sure he wanted to raise money from them again.

But frothy market conditions and budget demands at SEOmoz — his growing online marketing-software company — convinced Fishkin it was time. That and a good rapport with Colorado investor Brad Feld, who pulled a deal together in seven days.

The deal, made in March and being announced Tuesday, gives SEOmoz $18 million that will help grow the Seattle company from 60 employees to about 100 within the next 18 months.

Boulder-based Foundry Group, where Feld is managing director, was the lead investor. It was joined by Bellevue's Ignition Partners, part of SEOmoz's initial $1.1 million funding in 2007.

It's a big financing deal for a Seattle startup, especially for one that has publicly lambasted venture capitalists for shoddy treatment.

After $24 million in financing fell through last summer, Fishkin, 32, used his blog to detail a tortured process, following up on a similar confessional after a funding attempt in early 2010.

The blog posts were widely read and became helpful primers for other entrepreneurs.

But they raised questions about whether SEOmoz would ever get the capital it had sought to expand its business of providing tools and services for online marketers.

The company, founded in 2004, built an online community with more than 400,000 marketers. More than 15,000 pay for premium subscriptions.

"It was tough for me," Fishkin said of his decision to again seek venture funding. "These girls had broken my heart so many times I wasn't sure I ever wanted to go dating again."

He said it helped that he felt comfortable with Feld, who also has a widely read blog where he had commented on Fishkin's tribulations.

The relationship deepened after Feld and his wife began interacting with Fishkin's wife's travel blog.

Feld's Foundry Group has also backed Seattle startups Cheezburger, BigDoor and Gist, which was sold to Research In Motion, the BlackBerry phone maker, last year.

When Fishkin called Feld on March 9 for help on raising capital, Feld gave the advice then asked to lead the funding round. After a flurry of emails, Fishkin flew to Boulder and the deal was offered over dinner that night.

Fishkin said they really only haggled over the valuation of SEOmoz, which ended up at $75 million before the funding.

"SEOmoz is one of those companies that you just know is going to do big things," Feld said in Tuesday's news release.

Fishkin is eyeing potential acquisitions and mulling a name change to reflect that the company's marketing tools and services are now used for more than search-engine optimization.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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