Dan.com

information Big domain purchase = Big venture capital funding round of $100 Million+? Really?

NameSilo
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10,696
So I keep getting these news updates about how some startup secured an expensive single word dictionary word domain in .com and how it correlates to big money investors handing over hundreds of millions of dollars to the startup in funding rounds.

With such articles popping almost monthly I have to ask is really proof that if a startup buys an expensive domain that it automatically means because of the domain they got the big funding?

or does the credentials of the company itself get the credit for the big funding?

It's like those big domain sales we see on Namebio like for LasVegas.com or Vegas.com for $90 million or $35 million. One paper it looks like those prices were for just the domain purchase but when you do a background check you will see the sale included the websites plus all the backlinks. so it's not really about the big domain purchase.

I think the domain isn't the main reason but probably just 10% contribution to the big funding rounds of $100 million +. Maybe even less.

This sounds more like a psychology discussion.

I mean lets say a Venture Capital company that is looking to invest their $100 million in some startup. How does the startup owning an expensive dictionary keyword .com translate to them handing over $100 million? I just don't get it.

If I was the VC? I'd wonder or ask. "Did this company just squander $150,000 or $350,000 or even $50,000 of a single word .com when they could have shown some creativity and registered their own domain in .com?" "is this really the kind of company I want to hand over my $100 million + to?"

I mean I deal with big companies all the time and they are all about budgets. I'm talking big companies who will only offer $50-$100 for a domain.

Yet I am expected to believe that these same type of companies will invest $100 million dollars on a startup just because they secured a $100,000 or $50,000 .com dictionary keyword in .com?

I mean hey anything is possible but if I am to use such sales as examples in my own negotiations I'll need to explain why big purchases like the one below Sense.com equates to future venture capital funding rounds.

What do I think? I think these startups have more to offer than their domain name. They have good financials and quarterly earnings. They have a great idea that solves a problem.

If anything securing a dictionary keyword in .com is more about following the trend of startups using single keyword dictionary keywords with relevance to their biz. I don't think it really has anything to do with them getting a high funding round.

What do you think? Is there any data the supports the belief that because a startup paid big money for their domain that the purchase equates or resulted in their big funding round?

https://domainnamewire.com/2022/05/06/sense-closes-105-million-in-funding-using-sense-com/#respond
 

OwnedWords

Established Member
Impact
53
I think you're pretty spot on. The article you linked to is really just a press release by Sense.com about themselves. It was doing cartwheels to state the domain even mattered at all. Also to your point, Vegas.com was a full on business, they even put on the Las Vegas Film Festival and it was owned by the wealthy owners of a newspaper so it wasn't like a dude in basement running a $90 million blog.

I am friendly with a VC who likes domains. I know he named his latest social app by searching for a one word .com he could pick up for 5-figures. So it might be true that startups would like to have a great or exact match domain but its pretty obvious most don't even bother trying.
 
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