IT.COM

New Domain Investment Group, Any Interest?

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RJ

Domain BuyerTop Member
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I'm considering forming a Domain Investing Group. The basic concept is to seek out reasonably priced domains and purchase them for resale.

For instance, we would find xyz.com for sale by it's owner for $1000 and we are reasonably sure that the efforts of the group could resell the name for $5000.

The investments would be on a domain-by-domain basis, and each member could opt-in on any particular offer that is proposed to the group. The domain would be held in a single location and when it is sold for a profit the investors would receive their share of the proceeds.

The idea is to make it easier to be able to invest in and profit from quality domains.

Any interest in this? The minimum investment would probably be $100.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
I find it great.
For me all kind of investment are welcome.
Just i have to wait a bit for the money.
I will take my hollidays in a week (3 weeks around Europa), and i would like to save my money before them.
After that i will be please to be in the course.
 
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I think its a great idea
It kind of lets the people that dont have $1000 to buy a domain
get their peice of that pie B-)
 
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I agree with FreeOnli. I think I will pass on the offer though. I am solo.
 
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Originally posted by kohashi
I agree with FreeOnli. I think I will pass on the offer though. I am solo.

Nothing wrong with "flying solo", Koho ... in fact, that can be one of a domainer's biggest advantages. I think this is a GREAT opportunity here though to potentially go after higher caliber names with the hope of landing hopeful bigger payoffs!
Good Luck with this effort, RJ.
Also, to let folks know ... I'm leading a team for registering domains/drops/pending deletes for approx. the per member cost of registration in another thread here in this section. Once we get up-and-running, we'll have access to our own Private Forum and will be consulting with one another up until actual registration, marketing, and resale (or development).
The membership for that thread is now *closed*, but any folks that post from this point forward will automatically be included in the next team, round of teams. Wish us luck! :)
Thanks, and stay tuned!
B-)
 
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I might be interested in this RJ
 
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It's a neat idea. It's been debated before. We discussed this at length on Rick Schwartz's board.

The problem is the implementation. If you are talking real money from investors, you really need to setup a LLC or corporate structure to do it right. The rules have to be firmly established, and all investors have to be fairly represented.

Perhaps a limited partnership would work also. You could have big investors and small investors.
 
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RJ - Great idea. We did this for the past 4-5 years with some investors and other brokers - Not so much in the past year. It worked out fine - just alot of work to keep it straight. We set a min. of $50,000 investments and all names that were bought in the group had to have a min of $50K in wholesale value each. The return was good, but as the market slowed and prices fell everyone got a little nervous and our corporation bought every position. In concept it is a great idea, just real tough keeping all happy, specially in a falling market at the time. May work real well in the terms as you outlined - Hal (DotComCowboy) hit on a few legal issues that are extremely important to make something like this work. Best of luck.
 
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Sounds interesting to me RJ.
 
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I don't think it will all work out. If I put up $100 and we get a $1,000 domain name then that means I own 1/10th of it. Then if you want to sale it for $5,000 I would have a return of $500 on my $100 initial investment. What if I wanted to get out before it's sold? What if it's never sold? What if you want to sale it for $5,000 and I want to sale it for $50,000? Who will be the registered owner? What if he dies? What if he skips town and changes ownership? TOO RISKY FOR ME!!!! Good luck to all who join but I suggest thinking VERY hard about putting up any cash for something you don't have a legal claim to.
 
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Originally posted by customb
Then if you want to sale it for $5,000 I would have a return of $500 on my $100 initial investment. What if I wanted to get out before it's sold? What if it's never sold? What if you want to sale it for $5,000 and I want to sale it for $50,000? Who will be the registered owner? What if he dies? What if he skips town and changes ownership?

All these questions would be addressed first of course. The target sale price would be agreed upon before any investment.

Each investment would be on a domain-by-domain basis and I would expect each member would know domains enough to decide if the domain is "worth it".
 
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I can spare $100 for this RJ, I can help dig out the leads; I'm also starting to get comfortable with the cold call process, let me know when you're ready to start.

Don
 
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I'm always open to JVs and have had some successfull ventures in the recent past.

Here's an idea that I've kicked around for a bit. If I find the right people to work with we might have something great.

Everyone's heard of a drop right? Has anyone heard of a Domain Name Lottery? I was thinking of having a site that puts up a good domain name for grabs with, lets say, $10 buy in per person. At a given time a winner will be drawn and the domain given to him/her. If the domain's worth $50 and you get 10 buy ins that's a good profit :)

Maybe RJ can start something like that over here as part of NamePros :) Just a thought. Let me know what you guys think.
 
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I'm considering forming a Domain Investing Group. The basic concept is to seek out reasonably priced domains and purchase them for resale.

For instance, we would find xyz.com for sale by it's owner for $1000 and we are reasonably sure that the efforts of the group could resell the name for $5000.

The investments would be on a domain-by-domain basis, and each member could opt-in on any particular offer that is proposed to the group. The domain would be held in a single location and when it is sold for a profit the investors would receive their share of the proceeds.

The idea is to make it easier to be able to invest in and profit from quality domains.

Any interest in this? The minimum investment would probably be $100.

Flashback Probably the first of it's kind.
 
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I've discussed this at length in private groups with both senior and new investors. Although the concept sounds intriguing, we never came to a decisive conclusion.

The risk vs reward + legal aspects, is what terminated it from moving forward.

But, if this could be organized in a functional manner, I might be interested in joining. It would be great if it did.
 
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“affordable to the masses”

i love the idea.

Samer
 
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Can we make a Poll?

Samer
 
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I've discussed this at length in private groups with both senior and new investors. Although the concept sounds intriguing, we never came to a decisive conclusion.

The risk vs reward + legal aspects, is what terminated it from moving forward.

But, if this could be organized in a functional manner, I might be interested in joining. It would be great if it did.

Yes very hard to pull off. ego's need to be checked at the door. You really need to have things in place for when there is a potential sale.

10 people in group, do they all have the same expectations?

Meaning some people want to make a good profit, others always have their heads in the clouds, think every 3L.com is worth $250,000.

So we get an offer on our 3L.com that we paid $20,000 for, it's $60,000. 8 want to sell 2 don't. Now we have a problem and it will linger going forward. Even if you have something in place up front, like on any deal 51% of the vote decides. People will have bad feelings moving forward.
 
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13+ years ago we had this group running somewhat successfully. The partnership lasted a few years and we operated on a private forum here at NamePros and a Skype chat that we used to facilitate purchases.

There were agreements in place. When we bought names as group, shares were split on the members based on how much they invested on a per name basis. For sales, we decided on a target sales price upfront, but we had a 200% minimum return in place to protect smaller shareholders.

>> So we get an offer on our 3L.com that we paid $20,000 for, it's $60,000. 8 want to sell 2 don't.

This deal would have gone though since it's 300% return, but the 2 that didn't want to sell would have had the first option to buy the shares at the $60k rate from the other 8 if they really believed in a name.
 
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I found the original agreement that we operated under:

Overview

The Domain Name Buyers Group ( “the group”) is a small group of domainers who pool together funds to buy and share ownership in domain names. In a private forum we research and discuss expiring domains and purchasing opportunities and decide together which to target and how much money to commit to each.

Group will use a single SnapNames and Pool account for bidding on names at auction. Group leader or someone else assigned by the group will manage the account under direction of buyers in a project.

Initial Deposit

We request a minimum $750 upfront deposit. Funds are held by the group leader and applied to purchases made within the group that the group member agrees to.

Ownership Of Domain Names

Domains will be considered ownership of the individual buyers based on amount spent in that particular name. For example, if a domain name is purchased by the group for a price of $2000, with one buyer putting up $1000, and four buyers putting up $250, the $1000 buyer will own 50% with the remaining buyers each having a 12.5% interest.

Participating In Group Auction Purchases

When a group purchase proposal is made, any members that wish to participate can agree to the proposed maximum purchase price and commit as much of their funds as they would like towards the purchase.

Members may have their expenditure contingent on the maximum purchase price and can make different offers based on that price. For instance, Member X can agree to spend $500 if the name is purchased for any price under $2000, while at the same time agreeing to only expend $200 if the final price is more than $2000 but less than $3000.

At time of auction or offer to buy domain, group will attempt to acquire the name at a price up to the total amount of money committed by group members or the maximum purchase price, whichever is lower.

Determining Ownership Percentage

If more than the final purchase price is pledged by members, purchase amount and ownership percentage shall be determined by dividing interest equally among all pledging buyers up to their total expenditure, going from the smallest buyer first. The group member who proposes the purchase is guaranteed right to purchase up to a minimum 33% share in the ownership of it. The remaining percentage is available for purchasing by the remaining group members.

Examples (In all cases, Member A is the proposing member)


Example 1

$2800 total pledged – Final purchase price $2000
Member A = $1000
Member B = $1000
Member C = $500
Member D = $300


Final distribution of ownership share and expenditure per member:

Member A: 33% ($660)
Member B: 27% ($540)
Member C: 25% ($500)
Member D: 15% ($300)

Example 2

$2800 total pledged – Final purchase price $2000
Member A = $500
Member B = $1000
Member C = $1000
Member D = $300

Final distribution of ownership share and expenditure per member:

Member A: 25% ($500)
Member B: 30% ($600)
Member C: 30% ($600)
Member D: 15% ($300)

Example 3

$2800 total pledged – Final purchase price $2000
Member A = $2000
Member B = $600
Member C = $200

Final distribution of ownership share and expenditure per member:

Member A: 60% ($1200)
Member B: 30% ($600)
Member C: 10% ($200)

Determining “Sell Price”

If a domain name is bought with intentions to resell, owners of the domain will vote to decide on a minimum sale price (here by known as the “sell price”). Votes will be weighted based on shared ownership percentage, with a majority vote required to set the sell price.

If a majority vote cannot be reached or sell price is not discussed, the sell price will be assumed to be equal to 300% of the purchase price. Once decided upon, the sell price cannot be changed without a 2/3rds majority vote. Sell price can never be set below 200% of the purchase price unless there is a 100% vote.

Users can sell their shares in a domain at any time to other group members. In this case, the remaining shareholders should be given equal consideration to offer to purchase the shares from the selling member at the price he is offering them at.

Domain Name Use and Revenue

Domain names will be held in trust by group leader or a secure agreed-upon third-party. Usage of the domain shall be determined by 2/3rds majority of shareholders. If not determined, or agreement cannot be reached, domain will be parked with a reputable domain parking company.

If domain is parked or developed and is earning revenue, stats shall be made available to the domain's shareholders and income divided equally into the funds of the respective owners. This should be done regularly, no less every 3 months. It is recommended that names have renewal dates extended to at least 2 years from acquisition date. Domain renewal fees shall be split by owners.

Expired Domain Auctions

Members of the buying group should agree not to bid in auctions the group is bidding on. However if the price of the auction goes beyond the price the group has agreed to go to, then it is considered fair game. Manipulating auctions, purchase prices, or competing against the group is bad form, and can be considered as a reason for removal from the group.

Member Resignation or Removal

Membership in the buying group is completely voluntary. Member can leave the group at any time and their remaining uncommitted funds will be returned to them within 14 days.

Members can be voted out of the group by a 2/3rds vote of members. Reasons for removal may include, but not be limited to, inactivity (not participating in discussions or purchases for an extended time), breach of confidential information (group private forum is considered private), dishonesty, shill bidding, or competing against the group at auctions. If any member of the group resigns or is removed for any reason, their ownership shares in domain purchases will remain and not be forfeited. Remaining members of the group can opt to purchase the member's shares in any commonly owned names at the predetermined sell price.

UDRP / Loss of Domain

If domain is lost by the group in UDRP or lawsuit for any reason and is considered lost, the group as a whole or any particular member of it cannot be held responsible. Members accept this liability when deciding to purchase an individual name. To avoid this situation, it is advisable that we stay clear of trademark infringing names.
 
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13+ years ago we had this group running somewhat successfully. The partnership lasted a few years and we operated on a private forum here at NamePros and a Skype chat that we used to facilitate purchases.

There were agreements in place. When we bought names as group, shares were split on the members based on how much they invested on a per name basis. For sales, we decided on a target sales price upfront, but we had a 200% minimum return in place to protect smaller shareholders.

>> So we get an offer on our 3L.com that we paid $20,000 for, it's $60,000. 8 want to sell 2 don't.

This deal would have gone though since it's 300% return, but the 2 that didn't want to sell would have had the first option to buy the shares at the $60k rate from the other 8 if they really believed in a name.

That's what I thought you did, give them the chance to buy the equity. Most of the time no one has that amount of cash though. The sale the best choice in my opinion.
 
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Fractional domain ownership.
Issuing shares for a domain we already own.
And being able to submit a project for the acquisition of x domain.

Should be a registrar (straightforward, safe).

@DAN.COM had plans for fractional domain ownership.

Could also be Godaddy.
@Paul Nicks
@Joe Styler

Uniregistry domain exchange.
Being able to issue shares on premium domains.
Like 100 shares totaling 50% ownership of somedomain.com.

Great idea @RJ

Ps if afternic uni cant become godaddy
Then afternic should become uni
New platform
 
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